Investing for Children

Giving children a sound financial start in life is not difficult with early planning. There are many strategies parents and grandparents can adopt for building tax efficient funds, many of them considered here.

Child Trust Fund (CTF)

A Child Trust Fund (CTF) is a long-term tax-free savings account for children. All children eligible for a CTF account should now have one. See Junior ISAs and our 'Making the most of ISAs’ Key Guide

Savings Accounts

There are numerous bank and building societies offering special children’s accounts.

Growth Investments

Stock market investment is a more risky option, but worth considering for investment terms of over 5 years (as a minimum).

Trusts

Setting up a trust allows you to keep control of the money rather than giving it away outright, and can help to avoid inheritance tax.

Offshore Funds

Offshore sterling based unit linked funds benefit from a different tax treatment when compared to similar funds based onshore. Offshore funds grow free of most taxes and only suffer tax if/when the funds are remitted back to UK jurisdiction. As such, via careful planning, these type of funds can offer an excellent way of accumulating capital in a tax efficient manner.

Junior ISAs

The Junior ISA, or JISA, is available to children under 18 who do not already have a Child Trust Fund (CTF) account. The Junior ISA (JISA) is like the adult ISA. It is a ‘wrapper’ that protects the investments and savings held within it from income tax and CGT.