Invest Your Totally Free Child Trust Fund Voucher with Scottish Friendly, so Your Child Can Have a Large Lump Sum when They Turn 18
Have you heard the news about the Child Trust Fund? Not many UK parents surprisingly
low number of parents seem to be aware of the fact that all new babies receive a free £250 voucher from the government to invest. This 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 superb chance to for the future needs of a youngster
Scottish Friendly is a designated provider of the Child Trust Fund Voucher. The Government is keen for people to have access to Stakeholder accounts and this is the type of account that we provide. This means that:
• Investments are sent into our Managed Growth Fund, which seeks to provide strong growth potential
• It invests partly in shares to take advantage 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 comes with a low ‘Stakeholder’ funds charge of just 1.5% per year
• When reaching 18 the young person will receive a lump sum, wholly free of Capital Gains and Income Tax under current legislation
• It’s affordable – extra payments can be placed in the account from only £10
One of the highights of the Child Trust Fund is that anyone – parents, grandparents, aunts and uncles, friends – may contribute to the Fund to a maximum of £1,200 per year to help augment the child’s Fund (once added, this money is not allowed to be withdrawn).
Put succinctly our Stakeholder account offers a good balance between potentially high returns and a reduced level of risk. There is also the additional assurance that our account meets with the Government’s stakeholder criteria. However this doesn’t mean that returns are assured 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 invested) can go down as well as go up and is not guaranteed.
Only infants born on or after 1st September 2002 are eligible to open a Child Trust Fund. If you have older children who are not entitled you could think about saving for them with a Child Bond – it’s a tax-free savings plan aiming for long-term growth. It is undoubtedly the case that saving for your daughter is a rewarding means of preparing for tomorrow.
