Investing for Children – Child Trust Funds

Investing for Children – Child Trust Funds were introduced for children born between September 2002 and 2 January 2011, the introduction of Child Trust Funds preceded the introduction of Junior ISA’s.

Child Trust Funds still exist but since April 2015 you have been able to transfer your child’s CTF to a JISA if you wish to.

A lot of parents have been tempted to do so, as a far wider choice of provider and lower charges has proved quite compelling. If you do decide to switch your CTF for a JISA, you cannot change your mind after the switch has been made.

Both CTF’s and JISA’s have the same annual allowance of £4080.

It is worth mentioning an old favourite of mine –  taking out a pension for your child, this has the additional advantage of tax from HMRC that is added on top of any contribution up to £2880 in any one financial year.

Grandparents often like to provide funds for these little pension pots, the grandparents act as sponsors.

Why on earth would anyone consider making a pension contribution for a child?

The answer is that even a small investment into a pension early on in life can turn into a considerable sum of money – if invested wisely.

For the grandparents a further consideration is that long after they have passed away the grandchild will have cause to be reminded of their generosity.

It would seem sensible for parents and grandparents, who wish to benefit their children and grandchildren to take advice, particularly as investments for both JIS and Small Pension Pots need to be chosen with particular care.

Ray Best is a resilient Financial Planner with a unique approach to investment planning, his work ethic has propelled him from humble beginnings to be voted as a top UK Financial Planner by Vouched For (as published in the Sunday Times). These days he works with families with large investment portfolios or big inheritance tax liabilities, the first step, is to book a Discovery Meeting HERE.

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