Invest in the Future for Your Child, How to Invest the Two Hundred and Fifty Pounds
Heard about the Child Trust Fund? a small amount seem to have heard of the fact that all infants get a free £250 voucher from the government to invest in a Child Trust Fund. This voucher may be invested in any one of three sorts of CTF account, Stakeholder – a shares-based account thatswitches into cash, a savings account or a shares account. It is an excellent way to prepare for the future requirements of a child
Scottish Friendly is an approved provider of the Child Trust Fund The Government is eager for people to have access to Stakeholder accounts and this is the sort of account that we supply. This means that:
Investments are paid into Scottish Friendly’s Managed Growth Fund, which seeks to provide strong growth potential
It invests in part in shares to get the benefit of potentially higher returns over 18 years,compared to a cash deposit account (although the value of shares can
go down as well as rise whereas capital would be protected in a deposit account)
It is available with a low ‘Stakeholder’ funds charge of just 1.5 percent every year
At age 18 the child will get a lump sum, entirely free of Capital Gains and Income Tax under present legislation
It is affordable – additional payments can be put in the account from only £10
A notable attraction of the Child Trust Fund is that anyone – parents, grandparents, aunts and uncles, friends – if they want can give to the Fund to a top limit of £1,200 per year to help increase the child’s Fund (once added, this money is not able to be withdrawn).
All this means our Stakeholder account provides a good balance between possible high returns and a reduced level of risk. There is also the extra assurance that our account complies with the Government’s stakeholder criteria. Nevertheless this doesn’t mean that returns are assured or that Stakeholder accounts are appropriate for everyone. Remember that the value of shares in the Managed Growth Fund (where your Child Trust Fund money is held) can go down as well as go up and is not guaranteed.
Only infants whose birthday is on or after 1st September 2002 are authorised to open a Child Trust Fund. If you have children born before the above-mentioned date who are not qualified you could contemplate investing for them with a Child Bond – it’s a tax-free savings plan intended for long-term growth.
It is evident that saving for your daughter is a rewarding means of preparing for tomorrow.
