Guide to Child Savings - Alternatives

Child Savings Help

We all know that saving for our children's future is a good idea. Yet there never seems to be enough time to sort through all of the options and make a decision.

As parents ourselves, we understand the issues you face. You already know that kids are expensive. And with University Top Up fees and soaring home prices you fear that you might be supporting them well into the future. We're not here to scare you - we're here to help you.

We have listed some of the most popular ways to save for children below

Ways to save	Points to consider
Savings Account with a Bank or Building Society	Child can operate account from age 7 which means you can teach them how to manage money. No risk of losing money and immediate access to funds Interest is normally paid with tax deducted but you can register to get interest without tax deducted by asking the Bank for form R85. Alternatively you can open an ISA for yourself which is tax free. Minimum investment from £1 Can Top Up with KidStart Savings
Children's Bonus Bond	Operated by National Savings & Investments (www.nsandi.com) Can be bought by anyone over 16 for a child under 16 and last until they are 21 No risk of losing money but cash is locked away for 5 years Normally pays higher interest than a Savings Account since the cash is not accessible. Builds up a tax free lump sum Minimum investment from £25 Cannot yet Top Up with KidStart Savings
Friendly Society Tax-exempt plan	Money is invested in a share-based fund for 10 to 25 years Your child might get more in the end but there is no guarantee Be careful not to chose a fund with high charges Maximum investment is £25 per month Cannot yet Top Up with KidStart Savings
Unit Trust or Investment Trust	Money is invested in a share-based fund which you can sell at any time Money is taxed, but if the child is the owner it is likely to be mainly tax free. Alternatively you can open within your own ISA which is tax free. Usually Child has access from age 18 Minimum Investment from £25 per month Cannot yet Top Up with KidStart Savings