Parents urged to top up Child Trust Fund

As consumers search for more practical gifts this year, retail stockbroker, The Share Centre is urging parents and relatives to make the most of their kid's Child Trust Fund (CTF) allowance this Christmas by topping up the account. The Share Centre has also highlighted 4 shares, which could help CTFs sparkle this Christmas.

While this year has been challenging for investors, parents looking to invest long term for their kid's future could supplement the initial £250 voucher with regular donations. Each year you can contribute up to a maximum of £1,200 per child. Christmas is the ideal opportunity to add to the account, as it is often difficult for relatives and friends to know what to buy for kids.

Commenting on the benefits of the CTF, Guy Knight, director at The Share Centre, said: "The vouchers are a great start for a child, but unless a parent or grandparent tops it up it is not going to be worth a huge amount. If you only invested the initial £250 voucher and did not top up the account - assuming a growth rate of 7 per cent - the account could be worth £516.49 by the time the child becomes an adult. However, regular donations can really make a difference. If you invested £25 every Christmas the account could be worth £1,412.55, almost treble the amount."

Knight continues: "A good strategy for investing money in the stock market is to make regular investments; the same applies when investing in a CTF. By gradually investing money in the stock market investors can reduce their risk of buying overpriced shares, as the cost of the shares should be spread out over the period of investment."

For parents wishing to invest their CTF in the stock market, The Share Centre has identified 4 shares that may appeal to those investing on behalf of children:

1. Halfords

Quite often top of Santa's list is a shiny new bike. The car-maintenance chain and bicycle retailer may well benefit from penny-wise consumers, as many may consider buying more practical and long-term gifts this Christmas. In fact, recent first-half figures revealed cycling is one of the few divisions of retail that is resisting the downturn. Halfords weakened share price could offer long term value for investors as well as offering an attractive 6.6 per cent dividend yield.

2. Vodafone

Despite Vodafone's share price falling over 26 per cent this year, sales could receive a boost over the festive period. The mobile phone giant also plans to cut capital expenditure for 2009. Vodafone is currently offering a yield of 5.5 per cent.

3. HMV

Given the recent demise of Woolworths, children are likely to be spending their pocket money at other retailers such as HMV. Although the music, DVD and games store may well see some benefit, it is unlikely to impact figures significantly in the short term. The retailer's share price has held up reasonably well this year, having fallen just over 8 per cent. HMV is also currently offering a high yield of 7 per cent.

4. Dominos

Domino's Pizza is a major UK and Irish-based pizza delivery group, with a stock market valuation of just over £300million. The company has performed relatively well over the last six months as people opt for a cheap night in with a pizza instead of dining out. We could see this trend continue next year as people remain at home, but are reluctant to give up all their treats.

The Share Centre's Fair Deal for Newborns Campaign

In addition to championing the benefits of CTFs, The Share Centre has been running a campaign this year to get the Government to raise the value of CTFs in line with inflation. Since The Share Centre launched the campaign in the summer, over 500 investors have signed the petition. Supporters are encouraged to join The Share Centre's petition at share.com/fairdeal