Do you know what the Child Trust Fund is? Hardly any mothers and fathers remarkably

low number of parents seem to appreciate that all new babies get a free £250 voucher from the government to put. This vouchermay be invested in any one of threekinds of CTF account, Stakeholder – a shares-based account that swapsinto cash, a savings account or a shares account. It is a great opportunity to for the future life of a infant

Scottish Friendly is an approved provider of the Child Trust Fund Voucher. The State is eager for people to have access to Stakeholder accounts and this is the form of account that we are catering for. This means that:

• Investments are sent into our Managed Growth Fund, which hopes to provide good 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 candecrease as well as go up whereas capital would be protected in a deposit account)
• It comes with a low ‘Stakeholder’ funds charge of only 1.5% per year
• When reaching 18 the child will get a lump sum, wholly free of Capital Gains and Income Tax under prevailing legislation
• It’s affordable – additional payments can be placed in the account from only £10

A particularly advantageous aspect of the Child Trust Fund is that anyone – parents, grandparents, aunts and uncles, friends – may contribute to the Fund to a maximum of £1,200 per year to help augment the child’s Fund (once added, this money is not allowed to be withdrawn).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 potentially high returns and a reduced level of risk. There is also the additional assurance that our account meets with the Government’s stakeholder criteria. Nonetheless 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 placed) can decrease as well as increase and is not guaranteed.

Only children born on or after 1st September 2002 are allowed to start up a Child Trust Fund. If you have older children who are not eligible you could contemplate investing for them with a Child Bond – it’s a tax-free savings plan looking for long-term growth. The fact is that saving for your daughter is a rewarding means of preparing for the world to come.