Potency Tips

So what is this Child Trust Fund that all the talk is about?Are you one of the lucky people who are in the know about the Child Trust Fund? Are you clued up on the Child Trust Fund? Hardly any mothers and fathers startling

modest number of parents appear to appreciate that all new babies receive a free £250 voucher from the the State to put. Your son or daughter’s vouchercan be invested in any one of threesorts of CTF account, Stakeholder – a shares-based account that switchesinto cash, a savings account or a shares account. It is an excellent way to for the future life of a young person

Scottish Friendly is an approved provider of the Child Trust Fund Voucher. The Government is eager for the public at large to have access to Stakeholder accounts and this is the form of account that we supply. This means that:

• Investments are deposited into our Managed Growth Fund, which hopes to provide strong 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 canfall as well as rise whereas capital would be protected in a deposit account)
• It is available with a low ‘Stakeholder’ funds charge of just 1.5% per year
• At age 18 the young person will receive a lump sum, wholly free of Capital Gains and Income Tax under prevailing legislation
• It is affordable – additional payments can be placed in the account from as little as £10

A major attraction of the Child Trust Fund is that anyone – parents, grandparents, aunts and uncles, friends – if they want can contribute to the Fund to a top limit of £1,200 per year to help boost the child’s Fund (once added, this money cannot be withdrawn).

All this means our Stakeholder account provides 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. However this does not mean that returns are assured or that Stakeholder accounts are suitable for everyone. Bear in mind that the value of shares in the Managed Growth Fund (where your Child Trust Fund money is invested) can fall as well as increase and is not guaranteed.

Only infants whose birthday is on or after 1st September 2002 are qualified to open a Child Trust Fund. If you have above-mentioned date who are not qualified you could look at investing for them with a Child Bond – it’s a tax-free savings plan looking for long-term growth. It is evident that saving for your son is a rewarding means of preparing for hard times that may lie ahead.