Saturday, 13 June 2009

Child Trust Fund - Hedging the Children...

The very meager child trust fund held by child number two is dwindling.  It was started by a check given to him by the U.K. government in the amount of 250.00 pounds.  The government began this initiative a few years ago for qualifying children.  The stated goal was to encourage saving for children at a young age.  Since depositing the check into a UK growth and income fund we've not made any further contributions.  But we will.

Last year, he made £47.32.  This year, he has lost £55.49.  Very much in keeping with the movements of the markets.  He has 13 years to go before he can access the funds.  That ought to be just enough time to make a bit of money beyond the inflation rate.  Fingers crossed.  

I'm thinking of changing funds.  Adding in the 1.5% charge HSBC is laying on top for managing the account, I am unsure how well they or we can do.  From looking online at results of various funds before the credit crunch, and, returns from the past year, I'd say the CTF account through "Family Investments" looks reasonable.  An added bonus is all those little Nectar points accrued at Sainsbury's and through my gas and electric bill can be put into the fund.  That seems rather gimmicky, but, useful.  I need to do a bit more research.  These funds all seem to offer the least amount of information possible and make choosing very difficult.  And I can't choose based on a gimmick.  If they would just give me some info on the makeup of the fund...

Child number one has no such account as he was born before the qualifying period.  I suppose I ought to set up something similar.  It would be interesting to put his money into something that is dot opposite in investment strategy.  Alas, there seems to be no such thing that would provide the same tax benefit.

Hedging the children -- sibling rivalry at its finest...I suppose there is good reason that is not an option.

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