MoneyTalk April 2005

by Arch Financial Planning Limited

HELPING PARENTS SAVE FOR THEIR CHILDREN

Child Trust Funds (CTFs) were introduced by the Government with effect from 6 April 2005 to help parents save for their children. Parents who qualify will receive a voucher for £250 (or in some cases £500) issued in the child’s name which is to be invested in a Government approved tax-free savings fund. The fund can be invested in cash, bonds and equities over an 18 year period.

Once the child reaches his or her 18th birthday the money can be used for any purpose.

Around two million parents with children born after 1 September 2002 will already have qualified to receive a voucher provided that child benefit has been awarded to them and they live in the UK. A further nearly 700,000 children will now benefit every year.

Unfortunately many parents will simply ‘invest’ the money in a deposit account, which is unlikely to be the most appropriate type of investment for anyone for an 18 year investment period.

We have produced a new Fact Sheet: Child Trust Fund. If you would like to print-off a copy or read about this subject further, please visit our website www.arch-fp.co.uk/child_trust_fund.htm.

If you would like to receive a recommendation for a Child Trust Fund and you have an Arch adviser then please contact him or her, otherwise email direct@arch-fp.co.uk or telephone 01483 204600.

Information given relating to Income Tax legislation and Social Security benefits is based on our understanding of legislation and practice currently in force. Whilst we believe our interpretation of current law and practice to be correct in these areas, we cannot be responsible for the effects of any future legislation or any change in interpretation or treatment. In particular you are warned that levels of tax and tax reliefs and also State Benefits are subject to alteration and, in any case, the value of such reliefs and benefits may depend on an individual’s circumstances.

An investment into a CTF is a long-term investment. It is important that you are aware that the value of units in a unit-linked investment fund within a CTF can fall as well as rise. Where past performance is mentioned please note that the past is not necessarily a guide to future performance. These notes are intended as a guide only and do not replace the full product details that accompany each CTF investment. The present tax free treatment of the benefits may change.

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Arch Financial Planning Limited

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Tel: 01483 527278, Fax: 01483 527279

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