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You and your money
Have you ever thought about starting a savings account for your child? Imagine being able to give them a flying start to adult life, perhaps helping to buy their driving lessons, support them through university or even put a deposit down on their first house.
Child Trust Funds (CTFs) are long-term savings accounts which allow your child (but no one else) to access a pot of money once they turn 18.
The government starts them off by sending the parents a £250 voucher (£500 for low income families) when a child is born, and adds another £250 when they turn seven.
You simply take the voucher along to any CTF provider to open the account.
Parents, relatives and friends can add up to £1,200 a year to the savings, but no money can be taken out until the child reaches 18.
However, you can switch CTF providers at any time.
Hull and East Yorkshire Credit Union is working with the 'Choices Make a Difference' project (see page seven) at the city's Children's Centres to make more people aware of CTF accounts.
There are different types of CTFs available with banks, building societies, friendly societies and now your local credit union:
A cash savings CTF, like the one offered by the credit union, is a long-term, risk-free savings account.
When your child is 18, they are guaranteed to receive more than has been deposited (savings plus additional dividends).
A stakeholder CTF is an investment account.
Its value depends on the fluctuations of the stock market and may go down as well as up, making it more risky.
You can view a list of CTF providers and find out more at www.childtrustfund.gov.uk
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