Do you know what the Child Trust Fund is? Hardly any mothers or fathers seem to be aware of the fact that all babies are given a free £250 voucher from the government to place in a Child Trust Fund. The child’s voucher can be invested in any one of three kinds of CTF account, Stakeholder – a shares-based account thatswitches into cash, a savings account or a shares account. It is a superb chance to save for the future needs of a infant

Scottish Friendly is a licensed provider of the Child Trust Fund The State is eager for the general public to have access to Stakeholder accounts and this is the kind of account that we supply. This means that:

Investments are deposited into Scottish Friendly’s Managed Growth Fund, which seeks to provide good growth potential

An investment is made partly in shares to take advantage of potentially higher returns over 18 years,compared to a cash deposit account (although the value of shares can
decrease as well as go up whereas capital would be protected in a deposit account)

It is available with a low ‘Stakeholder’ funds charge of just 1.5 percent per year

When a person reaches the age of 18 the child will get a lump sum, entirely free of Capital Gains and Income Tax under present legislation

It is affordable – extra 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 – may add to the Fund to a top limit of £1,200 per year to help boost the child’s Fund (once added, this money cannot be withdrawn).

What this means is that our Stakeholder account offers a good balance between potentially high returns and a lower level of risk. There’s also the additional assurance that our account complies with the Government’s stakeholder criteria. Nonetheless this does not 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 placed) can go down as well as rise and would not be guaranteed.

Only children born on or after 1st September 2002 are allowed to start up a Child Trust Fund. If you have older kids born before the 1st of September 2002 who are not qualified you could look at investing for them with a Child Bond – it’s a tax-free savings plan intended for long-term growth.

The fact is that saving for a child.your children is a sound means of preparing for the future.