The information provided in this article was accurate at the time of publishing and should be read in the context of the date it was published. Views in this article are those of the author alone and do not necessarily represent the view of Scottish Friendly.

Investing for children

There are so many reasons to start investing for children. They’re the most lovable members of our family. But how is it that something so little can cost so much! And the cost only increases as they get bigger. That’s why many parents realise it’s important to start saving and investing for their children’s future whilst they’re young. And it’s not only parents who are in on the act. It’s Grandparents and if you’re child is lucky enough, it’s Aunts, Uncles and maybe even Godparents that are investing for children, too.

There are many ways that you can make investing for children a reality and Scottish Friendly can help you get started from as little as £10 a month. This could offer an affordable way to plan for their future, particularly if you are investing for many children. One of the ways Scottish Friendly has helped parents to begin investing for children is via an Investment ISA (also known as a Stocks and Shares ISA). There are two types available – an Investment ISA and Investment Junior ISA. The choice all comes down to what suits you and your child’s investment needs best.

Investing for children in a Scottish Friendly Investment ISA

You can decide the life event that triggers when your child receives the money invested in an Investment ISA , like My Choice (ISA). This is because you are using your own ISA allowance to set some money aside for your child. As long as you don’t exceed your current annual ISA allowance of £15,240, then you can set up as many policies as you want within your Scottish Friendly ISA and name each of them after the children.

My Choice (ISA) doesn’t just give you control over when the money is paid out but also where it is invested. With a choice of funds to choose from and flexibility to stop, restart, increase and decrease your payments at anytime, you’re in control of how you invest. To give your money access to the growth potential of the stock market this should be considered an investment for 5 years and ideally 10. The very nature of stock market means that your investments can go down as well as up and you could get back less then you paid in.

Find out more about My Choice (ISA)>

Investing for children in a Scottish Friendly Junior ISA

You can pay money into an Investment Junior ISA like My Choice (Junior ISA) from Scottish Friendly. This means that when the child turns 18, they receive the payout as the plan belongs to them. Once you have set up their plan, anyone can pay into it – Grandparents, Aunts and Uncles, etc. – as long as you don’t exceed the child’s annual allowance of £4,080 in this tax year.

Any relative paying into the Junior ISA can have their own contributions paid into a separate policy and name the policy from them, so that when the child turns 18 they’ll know who made payments into their plan. The fund aims to grow your money over time on the stock market, so it should be considered as a long-term investment. Please remember stock market investments can go down as well as up and your child could get back less then you paid in.

Find out more about My Choice (Junior ISA)>

Investing for children is important. We all want to do our best for them. There are so many life events that you’ll want to help them with – university, their first home, a marriage or civil partnership and possibly even money towards a first car. By starting now you could put little amounts away and over the long term it could all add up. Which is what you might need. Let’s face it the bank of Mum and Dad never closes!

No advice has been provided by Scottish Friendly. If you are in any doubt as to whether a savings or investment plan is suitable for you, you should contact a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting Advisers may charge for providing such advice and should confirm any cost beforehand.