Invest Your Totally Free Child Trust Fund Voucher with Scottish Friendly, so Your Child Can Have a Large Lump Sum of Money when They Get Older
So what is this Child Trust Fund that all the talk is about?Are you one of the lucky people who are in the know about the Child Trust Fund? Are you clued up on the Child Trust Fund? A surprisingly
insubstantial number of parents appear to appreciate that all newborn children receive a free £250 voucher from the government to put. The vouchercan be invested in any one of threetypes of CTF account, Stakeholder - a shares-based account that swapsinto cash, a savings account or a shares account. It is a great opportunity to prepare financial requirements of a child
Scottish Friendly is a designated provider of the Child Trust Fund Voucher. The State is eager for the public to have access to Stakeholder accounts and this is the sort of account that we supply. This means that:
• Investments are placed into Scottish Friendly’s Managed Growth Fund, which seeks to provide strong 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 canfall as well as increase whereas capital would be protected in a deposit account)
• It is available with a low ‘Stakeholder’ funds charge of only 1.5% per year
• At age 18 the child will receive a lump sum, completely free of Capital Gains and Income Tax under current legislation
• It is very affordable - extra payments can be put in the account from as little as £10
A particularly advantageous aspect of the Child Trust Fund is that anyone - parents, grandparents, aunts and uncles, friends - can contribute to the Fund to a top limit of £1,200 per year to help augment the child’s Fund (once added, this money cannot be withdrawn).
All this means our Stakeholder account provides a good balance between possible high returns and a lower level of risk. There’s also the extra assurance that our account meets with the Government’s stakeholder criteria. However this does not mean that returns are guaranteed 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 placed) can fall as well as go up and is not guaranteed.
Only children born on or after 1st September 2002 are qualified to open a Child Trust Fund. If you have older kids who are not entitled you could look at saving for them with a Child Bond - it’s a tax-free savings plan looking for long-term growth. The fact is that saving for a child is a sound means of preparing for hard times that may lie ahead.
