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Heard about the Child Trust Fund? A surprisingly

modest number of parents appear to appreciate that all babies receive a free £250 voucher from the government to put. This vouchercan be invested in any one of threevarieties of CTF account, Stakeholder - a shares-based account that changesinto cash, a savings account or a shares account. It is an excellent way to for the future life of a youngster

Scottish Friendly is a designated provider of the Child Trust Fund Voucher. The Government is keen for people to have access to Stakeholder accounts and this is the sort of account that we provide. This means that:

• Investments are paid into our Managed Growth Fund, which intends to provide strong growth potential
• It invests in part 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 increase whereas capital would be protected in a deposit account)
• It is available with a low ‘Stakeholder’ funds charge of only 1.5% per year
• At age 18 the young person will get a lump sum, completely free of Capital Gains and Income Tax under current legislation
• It is affordable - extra payments can be placed in the account from as little as £10

One of the great attractions of the Child Trust Fund is that anyone - parents, grandparents, aunts and uncles, friends - if they want can give to the Fund to a ceiling of £1,200 per year to help increase the child’s Fund (once added, this money cannot be withdrawn).

Put succinctly our Stakeholder account offers a good balance between potentially high returns and a lower level of risk. There is also the additional assurance that our account is in accordance with with the Government’s stakeholder criteria. However this does not mean that returns are guaranteed or that Stakeholder accounts are suitable for everyone. Remember that the value of shares in the Managed Growth Fund (where your Child Trust Fund money is held) can decrease as well as increase and isn’t guaranteed.

Only children whose birthday is on or after 1st September 2002 are eligible to open a Child Trust Fund. If you have above-mentioned date who are not allowed you could think about investing for them with a Child Bond - it’s a tax-free savings plan looking for long-term growth. The fact is that investing for your son is a sound means of preparing for the future.