What the Child Trust Fund Can Do for Your Son or Daughter,where to Invest the 250 Poundschild Trust Fund Voucher,Invest Your Totally Free Child Trust Fund Voucher with Scottish Friendly,Investing in a Child Trust Fund Builds a Sound Financial Foundation F
Are you aware of the Child Trust Fund and its benefits?A remarkably
small number of parents appear to have heard of the fact that all new babies receive a free £250 voucher from the the State to put. This vouchermay be invested in any one of threevarieties of CTF account, Stakeholder – a shares-based account that switchesinto cash, a savings account or a shares account. It is a great opportunity to prepare needs of a child
Scottish Friendly is an accredited provider of the Child Trust Fund Voucher. The Government is eager for people to have access to Stakeholder accounts and this is the form of account that we are catering for. This means that:
• Investments are deposited into our Managed Growth Fund, which seeks to provide strong growth potential
• An investment is made 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 candecrease as well as increase whereas capital would be protected in a deposit account)
• It comes with a low ‘Stakeholder’ funds charge of only 1.5% per year
• When attaining the age of 18 the young person will receive a lump sum, entirely free of Capital Gains and Income Tax under prevailing law
• It’s affordable – extra payments can be put in the account from only £10
A major attraction of the Child Trust Fund is that anyone – parents, grandparents, aunts and uncles, friends – can give to the Fund to a ceiling of £1,200 per year to help boost the child’s Fund (once added, this money is not allowed to be withdrawn).
Put succinctly our Stakeholder account offers a good balance between possible high returns and a lower level of risk. There is also the additional assurance that our account complies with the Government’s stakeholder criteria. Nonetheless this does not mean that returns are assured or that Stakeholder accounts are suitable for everyone. Bear in mind that the value of shares in the Managed Growth Fund (where your Child Trust Fund money is placed) can fall as well as rise and isn’t guaranteed.
Only children whose birthday is on or after 1st September 2002 are entitled to open a Child Trust Fund. If you have older kids who are not entitled you could consider investing for them with a Child Bond – it’s a tax-free savings plan aiming for long-term growth. There can be no doubt that saving for your son is a rewarding means of preparing for the future.
