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Make Sure You Take Advantage of Your Child’s Money

April 8, 2009

I would like to think that we are doing the best we can for our children’s future; the choice of school is normally the first option but what about the Child Trust fund?

A child trust fund is given to all children who were born after 31st August 2002, they receive £250 which can be invested in a tax free account, and children who fall into the low income bracket receive £500. It has been reported according to the HM Revenue figures that only a quarter of parents have not yet opened accounts for their children, although there is no time limit and the contribution is in a form of a voucher and you can let the government open an account for you if you do not open an account in the Child’s name yourself.

The choice of where to put your Child’s tax free fund could be quite confusing and with all other things happening in our busy lives, it may not seem to be top of your list of priorities. A child trust fund is very much like an Isa for children which they can receive the benefits at the age of 18.

A very useful resource for making a decision on where to put the Child Trust fund can be found on the Child Trust Fund site which is excellent and gives the facts about the fund and simplifies the terms which can make parents confused and often not bother investing the fund for the child themselves.

The rate of return which has been seen on investments recently has been 3% and on £250 over 18 years is a return of £770 which is not bad and the rates may increase over an 18 year period. An example is that £250 with a rate of 10% over 18 years would give a return of £2,100.

So if you have not already invested your child’s tax free fund then know could be a good way to be simply smart with money and invest for your child’s future.

by Fraser Cox

Written by paydayla · Filed Under Finance 

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