Are you aware of the Child Trust Fund and its benefits? surprisingly few appear to be aware of the fact that all newly born babies get a free £250 voucher from the government to place in a Child Trust Fund. The voucher may be invested in any one of three kinds of CTF account, Stakeholder – a shares-based account thatchanges into cash, a savings account or a shares account. It is an excellent way to save for the future needs of a infant

Scottish Friendly is an accredited provider of the Child Trust Fund The Government is eager for people to have access to Stakeholder accounts and this is the kind of account that we are supplying. This means that:

Investments are placed into our Managed Growth Fund, which seeks 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
fall as well as increase whereas capital would be protected in a deposit account)

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

When reaching 18 the child will get a lump sum, wholly free of Capital Gains and Income Tax under prevailing law

It is affordable – extra payments can be put in the account from as little as £10

A notable attraction of the Child Trust Fund is that anyone – parents, grandparents, aunts and uncles, friends – can give to the Fund to a maximum of £1,200 per year to help boost the child’s Fund (once added, this money may not be withdrawn).

All this means our Stakeholder account offers a good balance between possible high returns and a reduced 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 go up and is not guaranteed.

Only infants born on or after 1st September 2002 are eligible to open a Child Trust Fund. If you have older kids born before the 1st of September 2002 who are not eligible you could contemplate investing 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 rewarding means of preparing for the world to come.