Over the past few years saving or investing on behalf of a child has become a red hot topic on the personal finance agenda. The launch of the Child Trust Fund (CTF) has really added fuel to the fire.
CTFs were introduced by the government on 6th April 2005 with the dual aims of promoting the benefit of long-term saving and investing, as well as trying to educate children about money, saving, and financial planning.
The CTF is a savings and investment account for children who were born after 1 September 2002 (unfortunately children born before 1 September are not eligible for this initiative). Each child who qualifies receives a £250 voucher to start their account. These vouchers must be invested in a CTF account on behalf of the child by the adult responsible for that child.
As well as the initial £250, a further £1,200 can be saved each year on behalf of the child by parents, family or friends. The CTF itself is totally tax free. When the child is 7 the Government will make a further contribution, when they reach 16, they can take responsibility on deciding how the money is managed, and at 18, the money is theirs. Scary!
In addition to offering a CTF, Jump Savings also offers the Jump Savings Plan, a savings scheme specifically designed for older children who don’t qualify for the CTF voucher or for those parents who would prefer more investment flexibility than the CTF allows.
Both the Jump CTF and Jump Savings Plan are based on Witan Investment Trust, a leading global investment fund that invests in hundreds of blue-chip stocks and shares, spread across the world’s markets to minimise risk. Historically investments like these tend to outperform both bank and building society savings accounts. Although please remember that the value of an equity investment and the income from it can fall as well as rise as a result of currency and stock market fluctuations and you may not get back the amount originally invested.
To find out more about Jump Savings please click here. If you request either a Jump CTF or Jump Savings Plan brochure before the 31st December 2008 we will also send you a copy of “Money: Your Children, Their Future”, an invaluable guide for any parent, grandparent, aunt or uncle looking to save on behalf of a child.
Last updated: over 3 years ago