Salute Friend

Are you aware of the Child Trust Fund and its benefits?Hardly any mothers and fathers surprisingly

insubstantial number of parents seem to know about the fact that all infants are given a free £250 voucher from the government to place in a Child Trust Fund. This vouchercan be invested in any one of threesorts of CTF account, Stakeholder - a shares-based account that swapsinto cash, a savings account or a shares account. It is an excellent way to for the future needs of a infant

Scottish Friendly is an authorised provider of the Child Trust Fund Voucher. The Government is eager for the public to have access to Stakeholder accounts and this is the sort of account that we provide. This means that:

• Investments are sent into our Managed Growth Fund, which intends to provide strong 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 increase whereas capital would be protected in a deposit account)
• It comes with a low ‘Stakeholder’ funds charge of just 1.5% per year
• When attaining the age of 18 the child will get a lump sum, totally free of Capital Gains and Income Tax under current legislation
• It’s affordable - extra payments can be placed in the account from as little as £10

A particularly advantageous aspect 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the Fund to a top limit of £1,200 per year to help augment the child’s Fund (once added, this money is not able to be withdrawn).

Put succinctly our Stakeholder account provides 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 suitable for everyone. Remember that the value of shares in the Managed Growth Fund (where your Child Trust Fund money is invested) can go down as well as rise and is not guaranteed.

Only infants born on or after 1st September 2002 are qualified to open a Child Trust Fund. If you have older kids who are not qualified you could contemplate saving for them with a Child Bond - it’s a tax-free savings plan intended for long-term growth. It is undoubtedly the case that saving for your son is a sensible means of preparing for hard times that may lie ahead.