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Children grow up fast which means it is critical to start thinking about saving when they’re young. By saving from just £10 to £25 a month with Scottish Friendly’s Child Bond at this time you could make all the difference when they are older. Situations where this might prove useful might include helping to pay for university fees or making a payment to secure a first vehicle.
You can invest in a tax-free savings plan for any child with a Scottish Friendly Child Bond. It’s tax-free as it’s a friendly society savings plan, so under present-day law it grows free of income or capital gains tax. It certainly is a good way for parents, grandparents, family members and friends to make a huge financial difference when the kids are older.
In a nutshell the Child Bond is a with-profits investment plan: It invests for long-term growth as well as a certain degree of security, in stocks and shares, fixed interest funds and cash.
Money grows by way of the addition of potential yearly bonuses and when the bond matures there is a tax-free payout. The value of bonuses is dependent on how much profit we make and how the distribution is made.
It is important to bear in mind that bonuses are not guaranteed.
The Child Bond can last for a minimum of 10 years, but you are free to invest for longer if you like - perhaps to coincide with an 18th or 21st birthday. You can save either monthly, annually or with a lump sum payment.It is entirely up to you. Do not forget that if the plan is cashed in at a point prior to the end of the term, the amount the child will receive may be less than the amount paid in.
If you decide upon the monthly option, you can commence saving from as little as £10 a month - up to a maximum of £25 a month. 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 possible amount of £2,340 for ten years, this actually invests £270 a year into the Child Bond - a total of two thousand seven hundred pounds. The minimum lump sum of £1,040 will yield £120 a year for 10 years - a total of £1,200. This provides a means for you to make payment of all your premiums at once and is something that is popular with grandparents who like the reassurance of knowing all premiums for the entire term of the plan are taken care of.
Life cover is also included with this plan, so you should consider if this is appropriate for your financial needs.
