Today Is a Good Time to Look at Your Investing Options since Parliament Has Decided to Start Assisting Parents to save for Their Children with the Child Trust Fund
It is one of the weird aspects of this period of financial
upheaval that we are going through at the moment: the fact that investors have remained with the same old ways of generating their
finances.
This may be partially because of the restrictions that have been
applied to many classes of saving.
Limitations on the flexibility of long term
savings are thought by a lot of people to be onerous.
Of all the choices that are currently on offer the Child Trust Fund stands out from the crowd. It was created with children in mind.
For a start this Fund permits you to save up to £1,200 a
year for a young person and you can do that
tax-free. All interest or capital gains earned by the
money in the Fund is entirely free of capital gains tax or savings income tax.
Secondly there is no need to commit to regular fixed payments.
Of course one of the remarkable parts of the Child Trust Fund is the fact that the UK Government sends to all the parents of new born children a £250 voucher that
has to be invested in a Child Trust Fund account.
It may appear surprising that the State
has chosen to give out money for free.The idea is that the Fund
is an easy and effective way to begin saving for
your child and help a good
financial start to their life as an adult.
The mums and dads have a choice of what type of Child Trust Fund account to open. A popular choice is to get a high interest savings account or designated
Childrens Savings account that is offered
by most lenders.
You must decide upon not only which account is
safest for your child, but also which provider. Various different banks and financial organisations
offer approved child trust fund accounts. The government simply sends you a
voucher for £250, which you will vest in the account and provider of your choosing.
All providers are naturally regulated and must satisfy the terms and conditions stipulated by Parliament.
In closing I would like to describe some of the reasons why the
Child Trust Fund was established. It is viewed as a means of
encouraging individuals to save more. It is also seen as a means of
combatting child poverty. Another reason was that the government is
striving to instil the values of saving
in the current generation and crucially in future generations too. It is
considered that the general level of savings in the UK seems to be too
low and this step was one way to help ease the problem.
The future of a child is key to all parents and it is hoped that the information
provided here will help parents to see the choices and
chances that the Child Trust Fund presents.
