Advice - Investments and Children
The Child Trust Fund (CTF) is a tax-free savings vehicle available to children born on or after 1st September 2002. A child is eligible if Child Benefit has been awarded for them and they are living in the UK.
The government offers a starting voucher and a subsequent voucher on the child’s seventh birthday. Parents, family and friends may contribute up to a total of £1,200 a year into the account.
There is no access to the money in the CTF until the child is 18. The account and the funds contained in it are the child's property although it is managed by a person with parental responsibility until the child reaches the age of 16. Thereafter children manage their own CTF accounts. When a child turns 18 they will be able to withdraw the money and at that point he or she is entirely responsible for what happens to it. Whilst the Child Trust fund is of some value, relying on just the government contributions alone to meet future education / car / wedding / house costs is far from realistic and that is why many parents and grandparents save additional funds for their children and grandchildren.
Parents with children who do not qualify for the Child Trust Fund because they were born before September 2002 should certainly be looking for alternative financial solutions.
There are, of course, many solutions available from saving in a bank or building society account, to investing in the stock market, or even in a pension plan!
To make an appointment with one of our financial advisers please call 0116 275 6585 or send us an email.
