This new range of online products have been developed to meet the new uncertain environment but also to address the lessons of the Child Trust Fund.
(PRWEB UK) 24 June 2011
The four tax efficient products will be available from Scottish Friendly’s new website. They are aimed at meeting the changing investment needs of every family member and in particular filling the void left by the abolition of Child Trust Fund.
Scottish Friendly’s new product range are Tax-Exempt Savings Plans (TESP), which means that as long as the money is invested for a minimum of 10 years, under current tax law, the profits are not subject to income or capital gains tax.
Every family member (no matter how young) can invest between £15 and £25 per month tax free - and this tax-free savings allowance is over and above other tax free breaks such as ISAs, pensions or JISAs.
All products have simple charging, built-in life cover and, with no exit charges or penalties, investors have access to their capital whenever they need it.
The 4 tax-free products are:
Tax-Free Flexible Plan - for individuals wanting to invest for themselves
My Kid’s Flexible Plan - where parents can invest for their kids but with full parental control over the plan
Child Flexible Plan - where a parent or any other adult can invest for a child they care about, with the plan being in the child’s name.
Family Flexible Plan - which allows a family to invest together
Scottish Friendly are highlighting My Kid’s Flexible Plan which addresses the lessons of the failings of the now abolished Child Trust Fund (CTF), failings which the organisation say are about to be repeated with the imminent launch of the new Junior ISA plans.
Unlike the CTF or JISA, My Kid’s Flexible Plan provides full parental control, meaning that the plan does not pay out directly to the child. Also the Plan can pay out (without charge or penalty) before the child turns 18. All payouts are tax-free after 10 years, which is important to many parents who understand the costs of bringing up a child before he or she turns 18.
Similarly the Family Flexible Plan allows families to pool their tax-free saving allowances; for instance enabling a family of four to invest up to £100 a month.
These new investment solutions have been launched to meet the current uncertainty of the economic environment in mind. Charges are limited to a 1.5% annual management fee plus a small cost for integrated life cover. Investments are linked to a UK stock market tracker fund.
Neil Lovatt, sales and marketing director of Scottish Friendly said: “This new range of online products have been developed to meet the new uncertain environment but also to address the lessons of the Child Trust Fund. I’m sorry to say that the Government really has not listened to parents when they designed the new JISA. We know, from customer research, that lack of access to the plan proceeds before 18 and no parental controls were big problems for many parents eager to invest for their kids. This is why we’ve launched this new suite of flexible plans providing low cost long term investment opportunities with parental controls and access.”
The value of stock market investments can go down as well as up and investors may not get back the amount invested.
If the plan is cashed in early, a tax payment may be due.
The amount of life cover depends on the age of the plan holder and the amount invested.