Jan 23 2008
Unlike regular savings accounts, a child trust fund (CTF) allows parents to save for their children in a tax-efficient manner, one expert has made clear.
Anna Bowes, investments manager for independent financial adviser AWD Chase de Vere, has explained that a savings account is liable to full tax once it is generating £100 worth of interest annually, which is not the case for CTFs.
Furthermore, CTFs are opened on behalf of each newborn child in the UK and have a £250 voucher added, which Ms Bowes has described as a "great thing".
When it comes to saving in order to pay for a child's schooling, Ms Bowes recommends that parents opt to invest in an easy-access individual savings account.
According to the Tax Incentivised Savings Association, the value of typical CTF contributions in the UK have been rising steadily in recent months and years.
