Is there life after the Child Trust Fund?
With some of the political parties planning to scale back or abolish the Child Trust Fund (CTF) should they win the election, Informed Choice chartered financial planner Martin Bamford comments in Investors Chronicle about alternative ways of investing for your child’s future.
Describing the Child Trust Fund as potentially a ‘motorbike fund’ due to the lack of flexibility at age 18, where the money automatically passes to the child, Martin comments:
He says some parents are so concerned at the lack of control they have over the CTF they only invest the £250 start-up voucher and build up savings elsewhere for their children. There are efficient ways to build up a savings portfolio outside a CTF, which could also be a useful option after the election if you are no longer entitled to a CTF.
Martin also talks in the article about investing to utilise unused capital gains tax allowance (currently £10,100 in the 2010/11 tax year):
“Most parents do not use up their allowance on their own investments so using this you are likely to be able to offset any CGT the portfolio incurs,” says Mr Bamford.
You can read the article in full here.