Scottish Friendly is an approved provider of the Child Trust Fund. The Government is eager for the general public to have access to Stakeholder accounts and this is the sort of account that we are supplying. This means that:
• Investments are deposited into our Managed Growth Fund, which aims to provide strong growth potential.
• It invests in part in shares to take advantage of potentially higher returns over 18 years,compared to a cash deposit account (although the value of shares can go down 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
• At age 18 the young person will receive a lump sum, completely free of Capital Gains and Income Tax under current law.
• It’s extra affordable - payments can be put in the account from as little as £10
Anyone - parents, grandparents, aunts and uncles, friends - can give to the Child Trust Fund to an uppermost limit of £1,200 per year (once added, this money can not be withdrawn).
In a nutshell our Stakeholder account provides a good balance between potentially high returns and a lower level of risk. There's the extra assurance that our account meets the Government’s stakeholder criteria. Nonetheless this does not mean that returns are guaranteed 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 invested) can go down as well as go up and is not guaranteed.
Only children born on or after 1st September 2002 are qualified to start up a Child Trust Fund. If you have older kids who are not entitled you could contemplate saving for them with a Child Bond - it’s a tax-free savings plan for long-term growth.