| One of a parent’s biggest concerns, aside | | | | of £250 or £500 is made. |
| from nurturing and protecting their child, is to | | | | Basically, a child trust fund is a savings account |
| financially provide for them. Indeed, from the time | | | | that parents, relatives or friends can pay money |
| they’re born until they become independent, | | | | into for a child, on top of the initial government |
| children rely on their parents for everything from | | | | payment. A maximum of £100 per month or |
| food and clothing to spending money. | | | | £1200 per year can be paid in, which should then |
| Unfortunately for the parents, this doesn’t | | | | accumulate value until the child reaches the age of |
| come cheap. In fact, research has revealed that | | | | 18: until this point, they cannot gain access to the |
| the average cost of raising a child to the age of | | | | account and no one else is permitted to withdraw |
| 21 is a staggering £180,000. | | | | money from it. |
| In addition to requiring money when they’re | | | | Generally speaking, there are three types of child |
| living at home, children also need financial support | | | | trust fund accounts: savings accounts, accounts |
| when they reach adulthood in order to continue | | | | that invest in shares and stakeholder accounts. A |
| studying, for example, or buy a new house. | | | | savings account will see any money in the |
| However, with many families lacking disposable | | | | account earn interest over the period of its life. |
| income, it can be hard to afford the essentials, let | | | | Conversely, an account that invests in shares will |
| alone such things as further education or property. | | | | use the money to buy a stake in a company, |
| At the same time, no parent wants to deprive | | | | which means that if the company does well, the |
| their child of an independent life, or see them in | | | | value of the shares go up. |
| debt. That’s why, according to the experts, | | | | A stakeholder account also buys shares, but |
| planning for your child’s financial future when | | | | instead of investing in one company, it spreads |
| they’re young can help them to have the | | | | the money across a number of different ones. If |
| best start in life when they leave home. | | | | you don’t use your child trust fund voucher |
| Having started in 2002, the UK Government | | | | before its expiry date, HM Revenue and Customs |
| introduced a child trust fund initiative with the aim | | | | will open up this type of account for your child. |
| of helping parents do just this. Under the scheme, | | | | There are a number of benefits to be had from |
| every UK child receives a £250 child trust fund | | | | each of the accounts, as well as a wealth of |
| voucher – if you’re from a low income | | | | providers to choose from. Therefore, the best |
| family then you’ll get £500 – which is to | | | | thing you can do to ensure you find the best |
| be put into a child trust fund. When the child | | | | account for your child is research what’s |
| reaches seven years of age, a further payment | | | | available and find one you’re comfortable with. |