Invest Your Free Children Trust Fund Voucher with Scottish Friendly, so Your Litte One Can Have a Huge Lump Sum when They Get Older
Have you heard the news about the Child Trust Fund? A startling
small number of parents seem to be aware of the fact that all newly born babies get a free £250 voucher from the government to place in a Child Trust Fund. Your son or daughter’s vouchercan 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 save needs of a young person
Scottish Friendly is an accredited provider of the Child Trust Fund Voucher. The State is keen for the public at large to have access to Stakeholder accounts and this is the kind of account that we provide. This means that:
• Investments go into Scottish Friendly’s Managed Growth Fund, which hopes to provide good growth potential
• An investment is made partly in shares to make the most 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 is available with a low ‘Stakeholder’ funds charge of just 1.5% per year
• When reaching 18 the young person will receive a lump sum, completely free of Capital Gains and Income Tax under prevailing legislation
• It is affordable - extra payments can be placed in the account from as little as £10
An interesting feature 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give to the Fund to a top limit of £1,200 per year to help augment the child’s Fund (once added, this money cannot be withdrawn).
Put succinctly our Stakeholder account provides a good balance between possible high returns and a lower level of risk. There is also the additional assurance that our account is in accordance with with the Government’s stakeholder criteria. However this doesn’t mean that returns are assured or that Stakeholder accounts are appropriate for everyone. Bear in mind that the value of shares in the Managed Growth Fund (where your Child Trust Fund money is invested) can fall as well as go up and isn’t guaranteed.
Only children who were born on or after 1st September 2002 are qualified to open a Child Trust Fund. If you have older children who are not eligible you could look at saving for them with a Child Bond - it’s a tax-free savings plan aiming for long-term growth. The fact is that investing for a child is a sensible means of preparing for the future.
