Grandchild Flexible Investment Plan
Tax-free grandchild investment
Help them achieve their future dreams
Grandparents love to spoil their grandchildren and they love you for it. You get to enjoy all the fun of parenthood with less of the responsibility. Freed from the everyday costs of raising a child, you also have the chance to contribute to your grandchild’s future dreams – perhaps towards university, a gap year or buying their first car.
If you’re thinking about grandchild savings and investments the Grandchild Flexible Plan could be an attractive idea. With Grandchild Flexible Plan you make investments for a named grandchild, so that you can give them something to help when they start out in life.
Tax-free investments for the grandkids’
Grandchild Flexible Plan is an investment plan for grandchildren under 16. If your grandchild 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 grandchild you have!
With Grandchild 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 Grandchild 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 your grandchild needs the money earlier than planned, no problem. They have the flexibility to take their money out if they need to. However, if their plan is cashed in before 10 years 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. For details, please see Key Features. As the investment is the property of your grandchild, the money is paid out to them, so don't worry about your children (their parents) keeping the money for themselves!
Develop a regular savings and investment habit for your grandchildren
You put away a small amount into your grandchild 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 grandchild.
You can take out plans for as many grandchildren as you like. That is, as long as each grandchild's tax-free allowance has not been used up either with us, or another friendly society, then you're able to invest in the Grandchild Flexible Plan.
Putting money aside in grandchild investment plans could quickly become a habit. When you set up Grandchild Flexible Plan by Direct Debit, you choose the day the money leaves your account.
About growth and risks
Your Grandchild 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 grandchild 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 grandchild is not guaranteed to get back the original investment.
In order to qualify for the tax benefits under the plan, your grandchild 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 Grandchild Flexible Plan. You should consider if this is appropriate for their financial needs.
Get your Grandchild Flexible Plan
Submitting your application for Grandchild Flexible Plan with Scottish Friendly is safe and easy.
Make sure you have read and understood the Key Features for this grandchild investment plan then simply apply online.
If you apply, we suggest printing or saving a copy of this page, other relevant pages and the Key Features.