Bisulfide

Are you aware of the Child Trust Fund and its benefits? Few UK parents seem to have heard of the fact that all infants are given a free £250 voucher from the government to put in a Child Trust Fund. The child’s voucher may be invested in any one of three varieties of CTF account, Stakeholder – a shares-based account thatswaps into cash, a savings account or a shares account. It is an excellent way to invest for the future needs of a youngster

Scottish Friendly is an accredited provider of the Child Trust Fund The State is keen for the public at large to have access to Stakeholder accounts and this is the form of account that we are supplying. This means that:

Investments are saved into our Managed Growth Fund, which intends to provide strong growth potential

It invests 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 can
fall as well as go up 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 receive a lump sum, entirely free of Capital Gains and Income Tax under prevailing law

It is very affordable – additional payments can be put in the account from only £10

One of the great attractions of the Child Trust Fund is that anyone – parents, grandparents, aunts and uncles, friends – can give to the Fund to an uppermost limit of £1,200 per year to help increase the child’s Fund (once added, this money is not allowed to be withdrawn).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 is in accordance with with the Government’s stakeholder criteria. Nonetheless this does not mean that returns are guaranteed or that Stakeholder accounts are suitable for everyone. Bear in mind that the value of shares in the Managed Growth Fund (where your Child Trust Fund money is placed) can go down as well as go up and would not be guaranteed.

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

There can be no doubt that saving for a child.your children is a sound means of preparing for the future.