Parent's Flexible Investment Plan
Tax-free with parental control
Stay in charge to help them
Thinking about tax-free investments or a kid’s savings account for your child with parental control? The option of Parent’s Flexible Plan may appeal to you. With Parent’s Flexible Plan you make a tax-free investment for kids, but you keep control over how the money is spent.
Tax-free investments for kids
Parent’s Flexible Plan is an investment plan for UK residents, aged between 16 and 64. If you’re in that group, you’re allowed to invest up to £25 per month tax-free with a friendly society such as Scottish Friendly.
With Parent’s Flexible Plan – an adult tax-exempt savings plan (TESP), you use all or some of that money to make investments for kids. But, while you have the intention of giving the money to your child, the plan stays in your name. Your TESP allowance is over and above other tax-free allowances such as ISAs.
With Parent’s Flexible Plan you don’t pay tax on the growth of your investments (although like ISAs and pensions, tax is automatically deducted from UK share dividends). And there’s no tax to pay if you cash in after 10 years. Please note that tax treatment depends on your individual circumstances and the levels and basis of taxation may change in the future.
When you start your Parent’s Flexible Plan you choose to invest for the maximum18 years, with the aim to invest for at least 10 of these years. This gives your investment plan long-term growth potential plus a tax-free lump sum. But you can of course exit your investment plan earlier, just as you see fit.
If you need your money earlier than planned, no problem. You have the flexibility to take your money out whenever you need to. However, there will be a £50 deduction from your cash-in value before it is paid to you and you may have to pay tax on profits if you cash in your investment plan before 10 years. For details, please see Key Features.
You stay in control
Unlike other investments for kids, the money from Parent’s Flexible Plan is paid out to you, because you’re using your tax-free investment allowance to invest on behalf of your child.
So you keep control and decide how the money is spent. Just in case the little rascal wants to blow it all on a whim!
Develop a regular kids’ savings and investment habit
Parent’s Flexible Plan may also fit the bill if you want to develop a regular savings and investment habit.
What’s special about Parent’s Flexible Plan is that you’re in control, have access to the investments, and you can start it any time – even before your child is born.
You simply begin by putting away a small amount 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. This limit is set by the Government. As long as you haven’t used up your tax exempt savings allowance either with us, or another friendly society you can invest in Parent’s Flexible Plan.
Putting money aside for your child could quickly become a habit. When you set up payments into Parent’s 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 Parent’s 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 investment 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.
As a condition of the tax benefits, with us, you only pay a small cost for the life cover that’s automatically included on your own life. The level of cover and any deductions for the cost of cover depends on your age and monthly payments in Parent’s Flexible Plan. You should consider if this is appropriate for your financial needs.
Get Parent's Flexible Plan
Submitting your application for Parent’s Flexible Plan with Scottish Friendly is safe and easy.
Make sure you have read and understood the Key Features for this investment plan then simply apply online for investments for kids.
If you apply, we suggest printing or saving a copy of this page, other relevant pages and the Key Features.