Child - Tax Exempt Savings Plans


Many of your clients will want to start saving for the future of the children that they care for - whether it’s to pay towards university costs or even to go towards their first home. Our Tax Exempt Savings Plan is unique to friendly societies like ours and allows your clients to take advantage of an extra government tax break by saving on a regular basis. Unlike Child Trust Funds and Junior ISAs, that automatically pay out to the child at age 18, the contributor decides when the child receives the money - it can be at any age after their 16th birthday.

Help with saving


With our Healthy Investment Tax Exempt Savings Plan your clients are committed to paying in the same amount every month - meaning that they can build the child’s savings gradually over time. They can invest anything from £10 up to a maximum of £25 a month - if they want to invest more, then our Standard Savings Plan might be better suited.

A guaranteed return


We’ll agree, at the start of the plan the absolute minimum the child will get when the plan matures (as long as they’ve kept up all of their contributions of course). We also give regular bonuses every year and add them to the value of the policy. These can never be taken away - and the child may also get a final bonus at the end of the plan’s term. The level of bonus added each year is not guaranteed and can change.

A tax exempt pay out


Only friendly societies are able to offer these kinds of plans thanks to a unique government tax break. When the policy matures none of the money the child receives will be taxed, and the fund that the money is invested in is also free of UK income and capital gains tax. Investing in a Healthy Investment Tax Exempt Savings Plan helps to minimise the amount of tax your client might have to pay - this extra tax free allowance is in addition to their ISA allowances and is available to every member of their family.

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Your clients can choose how long they want to save for - anything from 10 years to 25 years. They’ll find it’s the perfect way to plan for a big event that’s coming up in the future.

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Your clients can grow the funds gradually for the child, safe in the knowledge that they won’t be paying a penny in tax on the money the fund has made.

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These kinds of Tax Exempt Plans are hugely popular - they may remind your clients of the kind of savings schemes their parents had when they were a child. Their money is invested in our With-profits Fund - a mix of different assets which are actively managed to maximise the potential for growth whilst managing risk.

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This plan includes life cover, meaning that if the child dies before the plan ends then their estate will receive the guaranteed sum assured plus bonuses (if all contributions are up to date). They won’t have to answer any medical questions on the child.


Important Points


Any UK resident can invest in a Healthy Investment Tax Exempt Savings Plan providing the plan matures before they are 65.

They might consider this plan if the child already has savings in a bank or building society and are now looking to put some money in to an investment which includes life cover, has some risk but potentially higher returns and the proceeds of which are paid tax free.

Save from as little as £10 per month or a maximum of £25 per month (or £270 per year).

They can have the Tax Exempt Savings Plan mature on a specific date, or simply select a term between 10-25 years, providing it matures on or after the child’s 16th birthday.

Depending on the term chosen they should see this as a medium or long term investment.

Important Documents


 

Standard Savings Plan

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Tax Exempt Savings Plan - Without Life Cover

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