Invest in the Future for Your Son or Daughter, Choose the Right Way to Invest the 250 Pounds
Heard about the Child Trust Fund? Hardly any mothers or fathers seem to realise that all new babies receive a free £250 voucher from the government to invest in a Child Trust Fund. Your son or daughter’s voucher can be invested in any one of three varieties of CTF account, Stakeholder - a shares-based account thatchanges into cash, a savings account or a shares account. It is a great opportunity to save for the future needs of a youngster
Scottish Friendly is an accredited provider of the Child Trust Fund The Government is eager for people to have access to Stakeholder accounts and this is the sort of account that we are offering. This means that:
Investments are sent into our Managed Growth Fund, which intends to provide good growth potential
An investment is made in part in shares to make the most of potentially higher returns over 18 years,compared to a cash deposit account (although the value of shares can
go down as well as go up whereas capital would be protected in a deposit account)
It is available with a low ‘Stakeholder’ funds charge of only 1.5 percent per year
When reaching 18 the child will get a lump sum, completely free of Capital Gains and Income Tax under current law
It is very affordable - additional payments can be put in the account from as little as £10
A notable attraction of the Child Trust Fund is that anyone - parents, grandparents, aunts and uncles, friends - if they want can give to the Fund to a ceiling of £1,200 per year to help increase the child’s Fund (once added, this money cannot be withdrawn).
Put succinctly 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 doesn’t 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 held) can go down as well as increase and would not be guaranteed.
Only children who were born on or after 1st September 2002 are allowed to open a Child Trust Fund. If you have older children born before the above-mentioned date who are not entitled you could consider saving for them with a Child Bond - it’s a tax-free savings plan which is intended for long-term growth.
It is evident that investing for your son is a sensible means of preparing for tomorrow.
