Child Flexible Plan
Tax-free child investment
Help them start out for adult life
With Child Flexible Plan you make tax-free investments for a child so that you can give them something to build on when they start out for adult life. You chose to invest for 15 to 18 years, but have the option to exit the plan earlier. The table below provides a brief summary of the plan. For more information on Child Flexible Plan please visit the in detail tab.
| i Your Child Flexible Plan | i Things you should consider |
|---|---|
|
|
No advice has been provided by Scottish Friendly in relation to this plan. If you are in any doubt as to whether this 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 www.unbiased.co.uk. Advisers may charge for providing such advice and should confirm any cost beforehand.
Help them start out for adult life
Thinking about tax-free savings and investments for a child? Child Flexible Plan could be an attractive idea with options that may suit you. With Child Flexible Plan you make investments for a child, so that you can give them something to build on when they start out for adult life.
Tax-free investments for a child
Child Flexible Plan is an investment plan for children under 16. If a child is in that group, you’re allowed to invest up to £25 per month tax-free with a friendly society such as Scottish Friendly.
With Child Flexible Plan you don’t pay tax on the growth of your child investments (although like ISAs and pensions, tax is automatically deducted from UK share dividends). And there’s no tax to pay when investment plans like Child Flexible Plan mature after 10 years. Please note that tax treatment depends on individual circumstances and the levels and basis of taxation may change in the future.
When you start your Child Flexible Plan you choose to invest for the child for 15 to 18 years. This gives your investment plan long-term growth potential plus a tax-free lump sum. But you can of course exit the investment plan earlier. Unlike some other tax-free child savings and investment plans, we won’t lock your child’s investment away until they turn 18.
If the child needs the money earlier than planned, no problem. You have the flexibility to take your money out for the child whenever you need to. With Child Flexible Plan you won’t get penalised by us if the child needs the money from the investment plan earlier, because we don’t charge for an early payout. However, the child may have to pay tax on profits if their Child Flexible Plan is cashed in before 10 years. For details, please see Key Features. As the child investment is the property of the child, the money is paid out to them.
Develop a regular child savings and investment habit
Child Flexible Plan may also be useful if you want to make regular contributions to your child investments and savings.
You put away a small amount into your child investments every month. That’s the regular bit. How much depends on you. The minimum is £15 and the tax free limit is £25 per month. You can take out plans for as many children as you like. That is, as long as the child does not already have a tax-exempt savings plan either with us, or another friendly society.
Putting money aside in child investment plans could quickly become a habit. When you set up Child Flexible Plan by Direct Debit, you choose the day the money leaves your account. Make it payday and you may hardly notice the payment.
About growth and risks
Your Child Flexible Plan money is invested in the Scottish Friendly UK Tracker Fund. The fund closely tracks the performance of shares in the stock market, investing in British household names such as Tesco, BSkyB and BT.
We regularly review our funds and what they’re tracking. So hopefully, as the value of the funds rise, your child investments can grow. Plus, annual dividends are reinvested in the fund to bolster long-term growth. Of course, as you know, share prices go down as well as up and you’re not guaranteed to get back your original investment.
With us, you only pay a small cost for the life cover that’s automatically included.
Child investments with life cover
Should the worst happen to the child during Child Flexible Plan, we can of course never console you, but at least their estate will have some financial help.
The child gets life cover with Child Flexible Plan. The level of cover and the cost of any deductions depends on their age and your monthly payments in Child Flexible Plan.
We hope of course that the life cover won’t be needed. So that the child could have something to build on when he or she starts out for adult life.
Get your Child Flexible Plan
Submitting your application for Child Flexible Plan with Scottish Friendly is safe and easy.
Make sure you have read and understood the Key Features for this child investment plan then simply apply online for child investments.
If you apply, we suggest printing or saving a copy of this page, other relevant pages and the Key Features.
How their money could grow
It’s impossible to tell you the exact return the child may get in the future but we can give you a rough idea. Take a look at what the child might get back if you start a Child Flexible Plan with Scottish Friendly.
Projected returns on £25 per month invested over 18 years*
Projected returns for illustration only. Remember your original investment is not guaranteed and the chilld could get back less than the amounts shown.
Investing in the stock market is not without its risks because shares can rise and fall and the child could get back less than you've paid in.
Source: Scottish Friendly. Based on investments of £25 per month for a child aged 3 at outset. *Total amount invested £5,400. These figures are only examples and are not guaranteed. They are based on premiums being paid for the full 18 years. They are not minimum or maximum amounts. What the child gets back depends on how your investment grows and on the tax treatment of the investment. The child could get back more or less than the figures projected above and the total amount invested. The annual rates of growth for the illustration have been based on our reasonable estimate of potential returns and are the maximum projection rates permissible by the Financial Services Authority. All the figures include the deduction of the actual charges assumed on the plan. Do not forget that inflation would reduce what the child could buy in the future with the amounts shown. (For more details on the effect of charges on your plan, please see the Key Features).
