Take Advantage of the £250 Voucher and Invest in a Child Trust Fund
Are you aware that newborn are given a free voucher from the the government to save in a Child Trust Fund. The child’s voucher may be invested in any one of three types of CTF account, Stakeholder – a shares-based account that switches into cash, a savings account or a shares account.
Scottish Friendly is an authorised provider of the Child Trust Fund. The State is keen for the general public to have access to Stakeholder accounts and this is the sort of account that we are offering. This means that:
• Investments are deposited into our Managed Growth Fund, which hopes to provide good 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 decrease as well as increase whereas capital would be protected in a deposit account).
• It is available with a low ‘Stakeholder’ funds charge of only 1.5% per year
• When reaching 18, the child will receive a lump sum, wholly free of Capital Gains and Income Tax under current law
• It’s affordable – additional payments can be placed in the account from just £10
Anyone – parents, grandparents, aunts and uncles, friends – can contribute to the Child Trust Fund to an uppermost limit of £1,200 per year (once added, this money may not be withdrawn).
In a nutshell our Stakeholder account provides a good balance between possible high returns and a reduced level of risk. There is also the additional assurance that our account meets with the Government’s stakeholder criteria. Nevetheless this doesn’t mean that returns are assured 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 invested) can decrease as well as increase and is not guaranteed.
Only children who were born on or after 1st September 2002 are allowed to start up a Child Trust Fund. If you have children who are not allowed you could look at investing for them with a Child Bond – it’s a tax-free savings plan for long-term growth.
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