Children grow so quickly which means it is crucial to consider saving when they’re still growing up. By saving from just £10 to £25 a month with Scottish Friendly’s Child Bond in their early years you could help them ride out future financial hard times when they are older. Situations where this might prove useful might include helping to pay for university fees or to find the money for a property.

You can save tax-free for any child with a Scottish Friendly Child Bond. It’s tax-free as it’s a friendly society savings plan, so under prevailing law it grows free of income or capital gains tax. It can be a wonderful way for parents, grandparents, family members and friends to make a significant financial difference when the childen are older.

Basically the Child Bond is a with-profits investment plan: It invests for long-term growth as well as a certain element of security, in stocks and shares, fixed interest funds and cash.

Funds accrues through the addition of potential yearly bonuses and at the point where the bond maturesthere is a tax-free payout. The value of bonuses is dependent on how much profit we make and how we distribute it. It is important to bear in mind that bonuses are not guaranteed.

The Child Bond runs for a minimum of 10 years, but it is possible to invest for longer should you like – perhaps to coincide with an 18th or 21st birthday. You can save either monthly, annually or with a lump sum payment.That is entirely up to you. It should be noted that if the plan is cashed in before the end of the term, the amount the child will be paid may be less than the amount paid in.

If you select the monthly option, you can start saving from as little as £10 a month – up to a maximum of £25 monthly. Or you can make once a year payments of up to £270 a year.

You can also make all of the premiums in one go through our lump sum funding plan. If you invest the maximum permitted figure of £2,340 for a 10 year period, this actually invests £270 a year into the Child Bond – making £2. The minimum lump sum of £1,040 yields £120 a year for 10 years – a total of £1,200. This provides a route for you to make payment of all your premiums at once and is something that has proved popular with grandparents who like the reassurance of knowing all premiums for the whole length of the term of the plan are taken care of.

This plan includes life cover so you should consider if this is fitting for your financial needs. See also our Child Trust Fund account

This entry was posted on Sunday, February 8th, 2009 at 12:46 am and is filed under Your Finance Resources. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.