Invest Your Free Child Trust Fund Voucher with Scottish Friendly, so Your Litte One Can Have a Huge Lump Sum of Money when They Turn 18
March 7th, 2009
Are you aware of the Child Trust Fund and its benefits? Not many UK parents noticably
sparse number of parents appear to be aware of the fact that all newborn children get a free £250 voucher from the the State to invest. Your son or daughter’s vouchermay be invested in any one of threevarieties of CTF account, Stakeholder - a shares-based account that changesinto cash, a savings account or a shares account. It is an excellent way to invest needs of a infant
Scottish Friendly is an approved provider of the Child Trust Fund Voucher. The Government is eager for the general public to have access to Stakeholder accounts and this is the type of account that we are supplying. This means that:
• Investments go into Scottish Friendly’s Managed Growth Fund, which aims to provide good growth potential
• An investment is made partly 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 rise whereas capital would be protected in a deposit account)
• It comes with a low ‘Stakeholder’ funds charge of just 1.5% per year
• When reaching 18 the young person will receive a lump sum, entirely free of Capital Gains and Income Tax under present law
• It is very affordable - extra payments can be placed in the account from as little as £10
One of the highights of the Child Trust Fund is that anyone - parents, grandparents, aunts and uncles, friends - can contribute to the Fund to a maximum of £1,200 per year to help augment the child’s Fund (once added, this money cannot be withdrawn).
What this means is that our Stakeholder account provides a good balance between potentially high returns and a reduced level of risk. There is also the additional assurance that our account is in accordance with with the Government’s stakeholder criteria. Nonetheless this does not mean that returns are guaranteed 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 go down as well as rise and isn’t guaranteed.
Only children whose birthday is on or after 1st September 2002 are authorised to start up a Child Trust Fund. If you have older kids who are not eligible you could think about saving for them with a Child Bond - it’s a tax-free savings plan intended for long-term growth. There can be no doubt that investing for a child is a sensible means of preparing for hard times that may lie ahead.
