Child trust funds to get additional 250 pounds
Children who become 7-year old next month will be among the first to get a second installment worth £250 into their child trust fund.
An initial payment of £250 is provided to parents of children born on of after Sep. 1, 2002.
The UK government introduced the Child trust funds with an aim of ensuring every child has savings at the age of eighteen.
Child trust funds provide tax free returns on savings and deposits made by parents, family and friends.
Child trust funds help parents mitigate rising cost of university education for their child by making them start saving for their child at an early age.
If only government’s contributions are invested, the concerned child is provided with an amount of £1,091 on his/her 18th birthday.
In case, parents contribute in the maximum of £100 a month for 18 years, their child would get approximately £37,100.
This would help parents to prevent re-mortgaging their house to pay for the university costs.
But, only about 40 per cent of parents have contributed anything into their CTF so far.