Child Flexible Plan

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 for each child you have!

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 the plan pays out. 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 the plan is set up for the maximum 18 years. You should aim to invest for at least 10 of these years to give the investment plan long-term growth potential plus a tax-free lump sum.

If the child needs the money earlier than planned, no problem. They have the flexibility to take their money out if they need to. However, there will be a £50 deduction from the cash-in value before it is paid to the child and they may have to pay tax on profits if their 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 per child. You can take out plans for as many children as you like. That is, as long as each child's tax-free allowance has not been used up either with us, or another friendly society, then you're able to invest in the Child Flexible Plan.

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 UK 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 your child is not guaranteed to get back the original investment.

In order to qualify for the tax benefits under the plan, the child will automatically receive a small amount of life cover. The level of cover and the cost of any deductions depends on their age and your monthly payments in Child Flexible Plan. You should consider if this is appropriate for their financial needs.

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.