What does the Child Bond offer?

Children grow so quickly, which means it's important to start thinking about their future when they're young. One way you can help is by giving them a gift that could grow with them - a Child Bond from Scottish Friendly. By saving from just £10 to £25 a month with Scottish Friendly's Child Bond now, you could make all the difference when they're older.

You can take out a bond for any child under 16. It could be your grandchild, godchild, niece, nephew or any other child you want to help. The bond is the property of the child and you can be sure that they will really appreciate that extra money when they are older.

The Child Bond is a specially designed tax-free with-profits savings plan which runs for a minimum of 10 years. Under current law (which might change in the future) this gives it two valuable tax benefits:

• all growth is free of tax (other than tax on dividends from UK shares)
• the child has no income tax or capital gains tax to pay on their payout

You can take out a Child Bond whenever you like: it doesn't have to be for a special occasion. The sooner you start saving, the bigger the payout the child will receive at the end of the bond life you choose.

Your premiums are invested in our With-Profits fund. This invests in a range of assets for long-term growth, as well as providing a degree of security in the form of a guaranteed minimum cash sum at the end of the bond's life. The with-profits guide provides details of how we go about managing your money.

Life cover for the child is also included with this plan so you should consider if this is appropriate for their financial needs.

How much can I save?

There are two options for saving:

Regular saving
You can save between £10 and £25 a month or between £120 and £270 a year.

Lump sum saving
This provides a way for you to take care of all your premiums at once and is especially popular with grandparents who like the reassurance of knowing all premiums for the full term of the plan are taken care of. It works by using your lump sum to set up a funding plan which invests in Scottish Friendly's taxable fund and guarantees to pay the annual premium into your tax-exempt Child Bond.

If you invest the maximum lump sum of £2,340 for a 10 year period, this actually invests £270 a year into the Child Bond - a total of £2,700. The minimum lump sum of £1,040 provides £120 a year for 10 years - a total of £1,200.

If you want the payout to mature on an 18th or 21st birthday, you may need the Child Bond to run for longer than 10 years. For example, if your child is 3 on their next birthday and you would like the Bond to mature on their 18th birthday, you would need a 15 year term - the maximum lump sum you could invest would be £3,190. Check the table below for the amounts you can invest for periods over 10 years:

Savings term	To save £120 a year	To save £195 a year	To save £270 a year
10 years	£1,040.00	£1,690.00	£2,340.00
11 years	£1,121.78	£1,822.89	£2,524.00
12 years	£1,200.44	£1,950.72	£2,701.00
13 years	£1,275.56	£2,072.78	£2,870.00
14 years	£1,348.00	£2,190.50	£3,033.00
15 years	£1,417.78	£2,303.89	£3,190.00
16 years	£1,484.44	£2,412.22	£3,340.00
17 years	£1,548.44	£2,516.22	£3,484.00
18 years	£1,609.78	£2,615.89	£3,622.00
19 years	£1,668.89	£2,711.94	£3,755.00
20 years	£1,725.33	£2,803.67	£3,882.00

How could the Child Bond grow?

You have the reassurance of knowing that, at the end of the bond duration you chose, the child will get back a guaranteed minimum cash sum which protects part of the total amount invested.

The child's actual guaranteed minimum cash sum will depend on how much you pay in each month. At first, the guaranteed minimum cash sum will be less than your total payments into the bond, however it is designed to grow through the addition of bonuses.

The main long-term growth potential of the Child Bond is through the addition of regular bonuses and a potential final bonus.

The value of any regular and final bonus we add is based on how much profit we make, our actual charges and investment returns and how we distribute this to members, like your chosen child. Future bonuses are not guaranteed.

How it could build

Projected returns on £25 a month invested over 10 and 15 years.

Projected returns for illustration only. Remember your original investment is not guaranteed and you could get back less than the amounts shown. Source: Scottish Friendly. Based on someone aged 6 next birthday at outset saving £25 per month. *Total amount invested over 10 years is £3,000 and over 15 years £4,500. The yearly rates of growth have been based on our reasonable estimate of potential returns and are lower than the maximum allowable investment growth assumptions. All the figures include the deduction of the actual charges assumed on the bond. These figures are only examples and the projected benefits are not guaranteed. They are based on premiums being paid for the full policy life. They are not maximum or minimum amounts; what you get back depends on how your investments grow. You could get back more or less than this. Do not forget inflation would reduce what you could buy in the future with the amounts shown.

Apply now

Applying is easy. Simply click on the Apply Online Now link, read the Key Features and With-Profits Guide and submit your application today. Or if you'd prefer to apply by post click on the 'download application' link to download an application form and read the Key Features and With-Profits Guide then complete it and post it to:

Scottish Friendly Assurance, FREEPOST, Glasgow G2 4BR

Or, you can request an information pack to be sent to you in the post. This pack includes further Child Bond information and an application form.

When you start saving with us, we'll send you a £10 Book Token for your selected child.

If you apply for this product, for your records, we recommend you print or save a copy of this and any other relevant pages together with a copy of the Key Features and With-Profits Guide.