Investing for Children

We all know what lies ahead for your children. Purchase of a car. Going to university. Buying their first house. You never know what  financial position you will be in at that time or whether you will be able to help. So it is always a good idea to start saving for your children as soon as possible. So here we offer some ideas currently available.
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Junior ISA

A Junior ISA is a tax-efficient children's savings account where you can make contributions on your child's behalf, subject to an annual allowance currently £4,128. Junior ISAs replaced the Child Trust Fund (CTF), but there is no government payment into Junior ISAs.

​Your child can have a Junior Cash ISA, a Junior Stocks and Shares ISA or both. If they have both, the most they can save is still subject to a £4,128 limit for the 2017/18 tax year. We favour Stocks & Shares ISAs and can advise and arrange these for you.

You can read more about Junior ISAs here.
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​Children’s savings accounts

• You can set up an account with a bank or building society on behalf of a child. They can start managing their own account once they reach the age of seven.
• Start an account with as little as £1.
• In some cases, your child can take out their money whenever they like.

These accounts are not our favourite in terms of growing your child's savings, but they offer a great way to learn how to manage money and help get kids into the savings habit. And some providers will include a gift with the account, like a money box.

​We would definitely recommend an account in addition to a more cumulative saving plan such as the stocks and shares ISA.
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​Friendly Society tax-exempt plan

• These children’s savings plans are only available through Friendly Societies. These are mutual benefit organisations, which means they’re owned by their members to work for the advantage of those members. As Independent Financial Advisers, we can source the most suitable friendly socity for you and set up the plan.
• You can choose to pay into the plan for between ten and 25 years.
• Money is invested in a share-based investment fund for the term length you choose. The maximum amount you can pay in is £270 a year, or £300 a year if you pay in £25 each month.
• On the maturity date, the child must be at least 16 and you must have paid into the plan for a minimum of ten years.
• The value of these types of investment can go down as well as up. Friendly Society policy charges also apply.
• As long as you continue to pay into the plan for a minimum of ten years, your child won’t pay Capital Gains and Income Tax on any gains or income.

 

It is worth noting the the National Savings & Investment (NS&I) currently do not offer any children's bonds. Also the Child Trust Fund Accounts have also been closed to new business. If you you like to discuss ideas on saving for your children or grandchildren, please contact us and we would be pleased to help.
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