Investing for Children
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The Child Trust Fund (CTF) is the government initiative set up to encourage parents to save for their children. CTF products are available from some financial providers.
However, not every child is eligible for a CTF - if your child was born before 1 September 2002 he/she won’t be entitled to a CTF.
In addition to the voucher from the government which is sent to every eligible child, family and friends can contribute to the CTF. The annual top-up investment limit is £1,200.
Parents whose children aren’t eligible for a CTF or who wish to invest more than the set annual limit will need to look at other options if they wish to save for their children.
SIT’s STOCKPLAN: A Flying Start is a flexible, low cost investing for children scheme. It is not a CTF product.
Flexibility
As it is not a CTF product, STOCKPLAN: A Flying Start can be used to invest for a child regardless of when the child was born. Furthermore there is no maximum investment limit - investors can make regular or lump sum investments for the child as often and for as much as they like (subject to the minimum investment amounts of £25 per month, and/or £250 for a lump sum investment).
The plan lets investors stop and start their investment whenever they want regardless of whether they invest monthly, via lump sums or through a combination of both options.
Accessibility
Although intended as a long term investment vehicle, STOCKPLAN: A Flying Start allows the investor to access their investment whenever they wish. Such flexibility could fund anticipated, or even unanticipated, expenses such as schooling or tuition fees, school trips or extra curricular activities before the child is 18 years of age - unlike the CTF where the money invested is held until the child reaches 18.
Competitive charges
Stakeholder CTF annual charges are capped at 1.5%, the non-stakeholder versions have no such charge capping.
STOCKPLAN: A Flying Start has very competitive charges. There are no initial or annual plan charges. In fact the only plan charge is £10 + VAT to withdraw some or all of your money from the scheme. As with all shares, government stamp duty of 0.5% is payable on purchase and there is a different buying and selling price.
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