A recent moneyfacts.co.uk user poll revealed that only 51% of people are aware of child trust funds and how they work. CTFs can provide a useful financial start to children as they reach adulthood, so to ensure you are not missing out we have provided an overview of the main points.
The child trust fund (CTF) is a Government savings scheme that came into effect on 6 April 2005. It is available to children receiving child benefit who were born on or after 1 September 2002. Under the initiative the Government provides a minimum of £250 in the form of a voucher. This is presented to one of the child trust fund providers, to open a tax-free account on behalf of the child.
Child trust funds - key features at a glance
Child trust funds - types of investment
There are three types of investment to choose from, depending on registered contact's attitude to risk:
You can only open one child trust fund account but you can switch accounts if you wish to do so. If you have a stocks and shares investment there may be charges for doing this, as the investments have to be sold.
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