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Save Your Totally Free Child Trust Fund Voucher with Scottish Friendly, so Your Precious Ones Can Have a Huge Lump Sum of Money when They Get Older

March 8, 2009 on 10:07 pm | In Uncategorized | Comments Off

Have you got to grips with the Child Trust Fund and the benefits that it can bestow upon your kids? A remarkably

modest number of parents seem to be aware of the fact that all newly born babies are given a free £250 voucher from the government to invest. Your son or daughter’s vouchercan be invested in any one of threekinds of CTF account, Stakeholder – a shares-based account that changesinto cash, a savings account or a shares account. It is a great opportunity to prepare needs of a youngster

Scottish Friendly is an approved provider of the Child Trust Fund Voucher. The State is eager for the public at large to have access to Stakeholder accounts and this is the form of account that we provide. This means that:

• Investments are placed into Scottish Friendly’s Managed Growth Fund, which aims to provide good 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 rise whereas capital would be protected in a deposit account)
• It is available with a low ‘Stakeholder’ funds charge of just 1.5% per year
• At age 18 the child will receive a lump sum, entirely free of Capital Gains and Income Tax under prevailing law
• It is affordable – additional payments can be placed in the account from only £10

A key feature of the Child Trust Fund is that anyone – parents, grandparents, aunts and uncles, friends – may add to the Fund to an uppermost limit of £1,200 per year to help boost the child’s Fund (once added, this money may not be withdrawn).

In a nutshell our Stakeholder account offers a good balance between potentially high returns and a lower level of risk. There is also the additional assurance that our account meets with the Government’s stakeholder criteria. Nonetheless this does not mean that returns are guaranteed or that Stakeholder accounts are suitable for everyone. Remember that the value of shares in the Managed Growth Fund (where your Child Trust Fund money is held) can fall as well as rise and isn’t guaranteed.

Only children who were born on or after 1st September 2002 are permitted to open a Child Trust Fund. If you have older kids who are not qualified you could look at saving for them with a Child Bond – it’s a tax-free savings plan looking for long-term growth. It is undoubtedly the case that investing for your children is a sensible means of preparing for the future.