PaydaySamba

Heard about the Child Trust Fund? a small amount appear to know about the fact that all infants get a free £250 voucher from the government to invest in a Child Trust Fund. The voucher may be invested in any one of three types of CTF account, Stakeholder – a shares-based account thatswitches into cash, a savings account or a shares account. It is a great opportunity to prepare for the future needs of a young person

Scottish Friendly is an approved provider of the Child Trust Fund The State is keen for people to have access to Stakeholder accounts and this is the sort of account that we are catering for. This means that:

Investments go into Scottish Friendly’s Managed Growth Fund, which hopes to provide strong growth potential

An investment is made in part in shares to get the benefit 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 every year

When a person reaches the age of 18 the young person will get a lump sum, wholly 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the Fund to an uppermost limit of £1,200 per year to help augment the child’s Fund (once added, this money may not be withdrawn).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 complies with the Government’s stakeholder criteria. Nevertheless this doesn’t mean that returns are guaranteed or that Stakeholder accounts are appropriate for everyone. Bear in mind that the value of shares in the Managed Growth Fund (where your Child Trust Fund money is held) can go down as well as go up and is not guaranteed.

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

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