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Child Trust Fund
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Article
Child Trust Fund Week highlights the ideal gift for the little ones in your life.
The Children’s Money Report revealed a quarter of mums worry about the example they’re setting their children on managing money. 70 per cent of young mums view their parents’ ability with money as being good or excellent but when it comes to their own spending habits, 42 per cent rate themselves as indifferent or bad at managing family finances. Now grandparents can put their financial wisdom to work by adding to their grandchild’s Child Trust Fund account. A contribution is a perfect gift to celebrate special occasions in their lives, such as christenings and birthdays, and helps children develop a savings habit. |
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The first CTF week
The first Child Trust Fund Week, which will be held from 15th to 20th January 2007, will be launched by former Emmerdale star and mum of two Sheree Murphy, along with TV’s independent financial expert Alvin Hall, and Treasury Minister Ed Balls. The event will raise awareness amongst parents of the benefits of opening and saving in a Child Trust Fund account and of providing a nest egg for their children. As well as reaching out to parents, the Week highlights the opportunity for grandparents to support their children on family finances and contribute towards their grandchildren’s future through the Child Trust Fund. |
Sheree Murphy and children. |
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Saving for the future
Looking forward to Child Trust Fund Week, Sheree Murphy said: "My children’s future is always top of my mind, and the Child Trust Fund is a fantastic way to start saving for them. Harry and I opened a Child Trust Fund account for our daughter Ruby and we encourage relatives and friends to contribute to it for her birthday and at Christmas. Watching it grow together will be a great way for Ruby to learn about the importance of saving for the future."
Treasury Minister, Ed Balls, added:
"Child Trust Fund Week will put saving for children in the spotlight. From putting pennies in the piggy bank to saving in a Child Trust Fund account, I want to help parents to put their children's financial future first."
The Children’s Money Report illustrates how much parents value good financial planning for their children, but also makes clear that some parents do not feel confident enough with their long term saving.
64 per cent of mums aged under 29 said they thought of money matters as a ‘headache’ and eight out of ten mums (78 per cent) said they felt as though they "never have enough money to save".
Independent financial expert Alvin Hall says: "Money matters can be daunting but it’s important that you don’t put them off! "
"There’s usually a simple solution and you can always seek help and advice before things get too out of hand. Why not make your new year’s resolution to get in better financial shape? My three top tips for saving with your child are: |
Alvin Hall | Alvin Hall's Top Tips
1. Aim to save regularly
Most people mistakenly make saving a last priority. But an easy way to save regularly is by setting up an automatic transfer into your child’s CTF account of £10 a month. By doing this you will barely notice it’s gone.
2. Help your child understand the value of money
Even when they’re very little, you can still gently help your children understand the value of money – for example, shop together and use cash rather than credit.
3. Know how and in what ways to involve your family in money matters
Birthday money for your child from a family member is a fantastic way to help build a nest egg for your child. Visit www.childtrustfund.gov.uk for information on where to go for help and advice."
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The Children’s Money Report:
The Government and Mother & Baby magazine commissioned the Children’s Money Report. The survey was carried out in May 2006 among 3,483 mums nationwide. The findings are as follows:
· British mums say that when it comes to money their child’s financial future is their biggest worry - with Scottish mums recording the highest rate (68 per cent). This worry was placed above staying in employment and generally ‘keeping their heads above water’.
· A quarter of mums worry about the example they’re setting their children in the way they manage their money. 42 per cent of mums think that they are indifferent or bad at managing family finances, but say that they want their children to be better at managing money than they are.
· Mums living in Wales and the border region are the most likely to worry about the example they’re setting to their child in managing money (32 and 31 per cent respectively), while London mums are the least concerned (19 per cent).
· Nearly all (97 per cent) mums say their children receive money from the tooth fairy which for eight out of ten was upto £1 each time. All mums said they give or plan to give their child pocket money and 63 per cent of them said children should receive this from five years old.
· Only 8 per cent of those surveyed say they save for the long term.
· Mums living in the West Country are overwhelming the most likely to say they don’t save money because ‘they enjoy spending it’ – 67 per cent compared to the national average of 18 per cent.
· More than a third of parents put aside money every month as savings.
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Background
· The Government’s Child Trust Fund (CTF) is a savings and investment account for children and is intended to give every child the best start in life, and to encourage savings amongst future generations.
· The Child Trust Fund (CTF) was launched in April 2005. 2.2 million accounts have now been opened.
· All children born on or after September 1st 2002 and who live in the UK, will be given a £250 voucher to open a CTF account. Children in lower income families will receive a further payment of £250 into their account once it has been opened.
· An additional payment of £250 will be made on the child’s seventh birthday with children in lower income families again receiving a further payment of £250.
· The CTF is a long-term savings and investment account. Family, friends and the child themselves can contribute up to £1,200 a year in total into the account. No one else will be able to withdraw the money and the child will not be able to access the account until they are 18. Neither the parents nor the child will be taxed on any interest or gains made in the account.
· Children will also receive financial education at school to help them manage their money with future needs in mind.
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For more information:
For information on Child Trust Fund Week and special events taking place throughout the week, please visit www.childtrustfund.gov.uk
Click here to find out more
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Reduce your exposure to motor insurance excesses if a new reg car catches your eye.
If you are picking up the keys for a new registration car in the coming months, keep a careful eye on what the insurer expects you to commit to in terms of your motor insurance exess warns Insure4excess.com |
Got your eye on a new car? |
Whilst many of us have become used to shopping around for the lowest car premium, we can easily overlook the trade off that often comes with this - a high insurance excess. Until now, many drivers have simply had to swallow this bitter pill, but Insure4excess.com has a new answer.
Insure4excess.com provides an insurance policy that insures the motor insurance policy's excess. This allows the driver to access cheaper premiums coming with higher levels of excess, but have the peace of mind of knowing their exposure to paying that excess is vastly reduced and could be nil, according to the Insure4excess.com policy option chosen. |
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This excess insurance policy is an annual one sold at two levels of cover - Silver and Gold. The annual Silver policy costs £39 (plus 5% Insurance Premium Tax) and covers an excess of up to £500. The annual Gold policy costs £59 (plus 5% IPT) and covers an excess of up to £1000. The policy limits apply to a twelve month period and up to two claims a year are covered within these limits.
A 25 year old male, living in Golders Green, trying to insure even a 2005 VW Golf GTI 2.0 Turbo will probably find themselves offered policies on which the excess could be as high as £1,020. Taking this high level of excess would see the premium fall from its starting point of about £2170 a year, to around £1400 - an attractive proposition, but leaving the Insured exposed to a potential risk of £1020 if they need to make a claim on the policy.
A 50 year old male, from the same postcode, seeking to insure a 2005 Mercedes S500 Automatic could pay anything from around £1540 to £996 for their insurance with one company, accessing the cheapest quote by taking an excess of £1020 rather than £50. |
Out of pocket
Insure4excess.com's Larry Ursich says: “For those taking a high level of excess, two issues arise. Firstly, there is potential exposure to a big future lump sum payment out of their own funds, if the worst occurs on the road. Secondly, any claim on the insurance policy would have to be a substantial one to make it worth seeking any reimbursement, if a top end insurance excess is taken out. Either way, the driver can be substantially out of pocket.
“The Insure4excess.com policy works alongside a motor insurance policy to allow the driver to make substantial savings on their motor insurance by taking a high level of excess, but without having as much risk exposure as would be the case without our protection.”
The highest excesses typically arise on high performance vehicles both more likely to be involved in accidents due to their powerful engines and be more attractive to car thieves. Younger drivers, those in certain jobs and those living in higher risk postcode areas may also find insurance companies levying higher excesses as a means of keeping premiums within affordable limits.
The Insure4excess.com policy is the answer for anyone who finds themselves in a position where they have to accept a higher excess, or for anyone wishing to voluntarily opt for a higher excess to keep their premium down. The savings achievable on motor insurance premiums can be as high as 20%, giving plenty of scope to purchase an Insure4excess.com policy to sit alongside the motor insurance and still save significant amounts of money.
The Excess insurance policy can be bought online at www.insurance4excess.com |
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| Some things to know about money
• The power of compound interest is phenomenal. If you save £1,500 each year at seven per cent interest over 35 years then you will have amassed £221,870.
• You will feel a lot better about things with money in the bank and no debts
• If you are about to buy anything, ask yourself if the item is worth the energy you expended on earning the money to buy it
• Although money may not buy happiness, it is a lot more comfortable being miserable if you have plenty in the bank
• Pay with cash for a while to get a real feel for what you are spending. Cards have caused us to become ‘disconnected’ from real money. |
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Which Bank?
How do you go about getting a bank that will satisfy your financial needs? Are there any top tips that can guide you to the right decision?
Well, there is only one really - your own feelings about the matter and the way you perceive the different banking brands. Some banks may offer slight gradations of interest rates payable on current accounts, for example, but the essential services they offer will be pretty much the same in every case.
And if you drop into the red in an unauthorised fashion, it’s a sad fact that none of the banks will be particularly sympathetic to you. |
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| The direct route
In the last 15 years or so technology has revolutionised the way we do our banking. Telephone banks were the cutting edge for a while and they are still very popular. First Direct and Alliance & Leicester, for example, offer well-regarded telephone banking services.
But now the opportunities offered by the Internet for online banking are taking many bank customers into cyberspace. The sheer speed and convenience of online banking argue persuasively in its favour, and to be able to pay your gas bill at three in the morning by just clicking a mouse is convenient for some. |
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It is also often the case that online banks like Smile, Cahoot and Egg offer better rates of interest on their current accounts than their high street-based counterparts. So, do your research and see if you can grab yourself an online banking package that meets your standards.
Branch is best
For all the convenience offered by telephone and Internet banks, some people prefer the reassurance of face-to-face communication when it comes to banking.
All of the major banks have a high street presence, of course, and the so-called Big Four (NatWest/RBS, Barclays, Lloyds TSB and HSBC) are all over the place, although some have pulled out of rural locations.
As ever, the choice is yours
Click here to find out more
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