A Child Trust Fund (CTF) is intended to be a long-term tax-free savings account for children, first introduced by the Government in 2005. The programme helped children born between September 1, 2002 and January 2, 2011 – many of whom will now be teenagers or adults. Research from the Association of Financial Mutuals (AFM) has estimated more than 300,000 teens are still to claim their funds.
Firstly, he said, a Lifetime ISA (LISA) could be a sensible option, intended to help 18 to 39 year olds.
The tax-free accounts can help savers to get a 25 percent top up from the Government, worth some £1,000 per year.
But individuals should be aware this type of account is only intended for those saving for a first home, or for their retirement.
Finally, people may wish to “dip a toe” into the world of investing through a stocks and shares ISA.
For example, ethical or green investment is becoming increasingly popular amongst younger people.
Teenagers should have received letters telling them how they can claim the money.
The money belongs to them, and individuals can only take it out upon reaching the age of 18.
There is no tax to pay on the CTF income or any profit it makes overall.
Published at Tue, 31 Aug 2021 23:01:00 +0000