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When a child is
born, its parent or guardian will receive
a £250 voucher from the Government
to open a Child Trust Fund account.
The account is in the name of the child
and no money can be taken out until
it reaches its 18th birthday.
- For your children
to qualify, all you need to do is
make sure they are receiving child
benefit.
- Child Trust
Fund accounts will be available from
places such as banks, building societies,
friendly societies and insurance companies,
and you can choose how you want to
invest the money for your child, for
example in a bank account or an investment
linked to the stock market.
- To help the
nest egg grow, family and friends
can top it up to as much as £1,200
a year until the child’s 18th
birthday.
- Any interest
that the money earns will be tax
free, helping the money to grow
faster over the years. To find
out more about how interest helps
money grow, have a look at our section
on interest.
- Some babies
will get more money. If you receive
a Child Tax Credit and have an annual
income of £13,480 or less, the
Government will give your child an
extra £250, making the total
up to £500.
- The Government
has said it will make a second payment
of £250 (or £500 if the
child qualifies) into the account
on the child’s seventh birthday.
- The account
belongs to the child so no one else
can touch the money.
- You can’t
escape! If a year goes past and you
haven’t used your voucher, the
HM Revenue & Customs will set up an account
for your child.
If you want to
find out more information, including
the sorts of Child Trust Fund accounts
that are available and how to open one,
click
here to visit the Government’s
Child Trust Fund website
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