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The Child Trust Fund – will it enable your offspring to buy a new car at 18 or will they have to settle for a second hand bike?
As the Government’s long awaited multi-million pound give-away for children finally gets under way, letters explaining how the trust fund works will be sent to the parents of nearly 2 million children, born since 1 September 2002.
Included
within the letter will be a voucher worth between £250 and £500 and
every child qualifies for the lower figure, with the higher amount being
awarded to children of low-income families claiming the full Child Tax
Credit. A
further payment will be made to children following their seventh birthday.
This voucher can be sent to any Child Trust Fund provider, which will
look after it on the baby’s behalf. The money can only be withdrawn
by the child at, or after, their 18th birthday, however, it can be switched
between funds, by the parents, over the years.
In addition to the voucher, the rules allow up to £1,200 extra to be
added to the fund every year and all interest and growth can be kept
tax free.
Experts say it is vital to take advantage of this, especially since
other tax breaks, (such as those applying to ISA’s), are being whittled
away!
For more details, talk to your Family First IFA.
Click here to send an eMail request for advice on Children's
Savings Plans