Cheryl Taylor, Branch Manager of the Stroud & Swindon Building Society in Stonehouse talks to many people about the best ways to invest their savings and often has to deal with customers wanting to encourage their children to get into the savings habit.

Over recent years we have tended to become a nation of spenders and the amount of money we save as a percentage of our income has been in decline. However the Government has now come up with a new initiative designed to help reverse that trend and encourage savings amongst our youngest children.

Called the ‘Child Trust Fund’ it will give children a financial boost when they reach 18 and to help, the Government is providing every child born on or after 1 September 2002 with a voucher worth a minimum of £250 now. These vouchers will be dropping on parents’ door-mats any day and they will have then have to decide where to invest the money which could be for example with your local building society or bank. The voucher is however for the child and will always belong to them, although parents can nominate themselves as their child’s registered contact.

The fund will run until the child reaches 18 and no money can normally be withdrawn in the meantime although additional amounts of up to £1200 can be paid in each year. Again the Government is helping to encourage this process by promising a further contribution to the fund during the child’s seventh birthday year.

All this is obviously good news for those children that qualify, but what about those born before 1 September 2002?Will they lose out to their younger brothers and sisters? Does this place an unfair burden on parents wishing to treat their children the same? Well there are some excellent savings schemes for young people and while they may not have the benefit of a boost from the Government, they nevertheless can help encourage the savings habit from a young age.

For example if you saved £25 a month into a building society deposit account for 18 years at an interest rate of 4.5% you would have accumulated about £8250 at the end of the period. A great boost at a time when university fees may be looming or a deposit for a house may be needed. There is never a bad time to start saving and the best time is now, just make sure that you get some good advice first.

For further details about Child Trust Funds and other savings plans for young people, contact Cheryl Taylor at the Stroud & Swindon Building Society in Stonehouse on 01453 824 610 or Stroud & Swindon Building Society in Stroud on 01453 755 959.