Health Upgraders

Heard about the Child Trust Fund? Not many UK parents appear to realise that all newborn children receive a free £250 voucher from the State to put in a Child Trust Fund. The child’s voucher can 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 a superb chance to prepare for the future requirements of a child

Scottish Friendly is an authorised provider of the Child Trust Fund The Government is eager 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 deposited into our Managed Growth Fund, which hopes to provide strong growth potential

It invests 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
fall as well as rise whereas capital would be protected in a deposit account)

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

At age 18 the young person will receive a lump sum, entirely free of Capital Gains and Income Tax under current legislation

It’s affordable – additional payments can be put in the account from as little as £10

An interesting 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to an uppermost limit of £1,200 per year to help augment the child’s Fund (once added, this money is not allowed to be withdrawn).

Put succinctly our Stakeholder account offers a good balance between possible high returns and a reduced level of risk. There is also the extra assurance that our account is in accordance with with the Government’s stakeholder criteria. Nevertheless 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 placed) can go down as well as increase and is not guaranteed.

Only infants who were born on or after 1st September 2002 are authorised to open a Child Trust Fund. If you have older kids born before the above-mentioned date who are not entitled you could consider saving for them with a Child Bond – it’s a tax-free savings plan which was created for long-term growth.

The fact is that investing for a child.your children is a rewarding means of preparing for the future.