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Child Trust Fund

A scheme where children born between 1 September 2002–31 December 2010 have an account that the government used to pay some money into. Family and friends can add extra. Withdrawals are not normally allowed before the child turns 18. To cash in a Child Trust Fund account before the child reaches 18, contact the Child Trust Fund Office on 0845 3021470. You should contact a financial adviser first.

Financial adviser

A professional who looks at your financial goals and personal circumstances. Then they recommend suitable financial products, services or practical things you can do to meet your goals.

Individual savings accounts (ISA)

A cash ISA is a savings account that gives a tax-free return. A stocks and shares ISA is a way of holding share-based and similar investments that gives an almost tax-free return.

Junior ISA

An individual savings account for a child who doesn’t have a Child Trust Fund. The government does not contribute any money to these, but family and friends can pay in. Withdrawals are not normally allowed before the child turns 18. To cash in a Junior ISA before the child is 18, contact the HMRC ISA helpline on 0300 200 3312. You should contact a financial adviser before cashing in a Junior ISA.

Life insurance

There are two types of life insurance: term insurance and investment-type insurance. Term insurance only pays out if you die within a set time (the term). Investment-type life insurance pays out an agreed sum when you die, but it can also be cashed in during your lifetime, so it can be used as an investment.

Share-based investment

An investment fund (for example, a unit trust) that invests in shares or in a direct holding of shares in a company. The value of these investments can fall as well as rise.

Surrender charge

A charge you pay if you cash in an investment part way through its term or within the first few years. It applies in particular to investment-type life insurance products.

Waiver of premium benefit

An option that some insurance policies have. It means the regular payments (the premium) will be paid for you if you can’t work because of illness or disability.

Elsewhere on macmillan.org.uk