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Are you aware of the Child Trust Fund and its benefits? Hardly any mothers or fathers seem to know about the fact that all newly born babies are given a free £250 voucher from the government to place in a Child Trust Fund. The voucher can be invested in any one of three sorts of CTF account, Stakeholder – a shares-based account thatswaps into cash, a savings account or a shares account. It is a great opportunity to prepare for the future requirements of a child

Scottish Friendly is an authorised provider of the Child Trust Fund The Government is eager for the general public to have access to Stakeholder accounts and this is the type of account that we are catering for. This means that:

Investments are deposited into Scottish Friendly’s Managed Growth Fund, which intends to provide strong growth potential

It invests 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 can
go down 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 percent every year

When reaching 18 the child will get a lump sum, totally free of Capital Gains and Income Tax under present legislation

It is affordable – extra payments can be placed in the account from only £10

A major attraction of the Child Trust Fund is that anyone – parents, grandparents, aunts and uncles, friends – may add to the Fund to an uppermost limit of £1,200 per year to help augment the child’s Fund (once added, this money is not allowed to be withdrawn).

All this means 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. Nevertheless this does not mean that returns are guaranteed or that Stakeholder accounts are suitable for everyone. Remember that the value of shares in the Managed Growth Fund (where your Child Trust Fund money is held) can fall as well as increase and would not be guaranteed.

Only children born on or after 1st September 2002 are qualified to start up a Child Trust Fund. If you have older kids born before the above-mentioned date who are not eligible you could think about investing for them with a Child Bond – it’s a tax-free savings plan which was created for long-term growth.

The fact is that saving for a child.your children is a rewarding means of preparing for the future.

Filed by admin at 12:07 pm under Finance Resources, Investment
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