Child Savings

When considering child savings plans there are a number of options available.

The Child Trust Fund: The Child Trust Fund gives every child born on or after 1st September 2002 and in receipt of child benefit, a free personal kickstart to their savings worth at least £250. You will need to invest your voucher in a CTF account.
Bank Savings: For young children, parents can open a savings account on behalf of a child, although there is a potential tax liability on the parent if the interest on the child savings account exceeds 100 pa. If the account is taken out in the child's name, by filling in Inland Revenue form R85 interest will be paid gross, as long as the child's income does not exceed the personal tax allowance of £5,435 in the current tax year (2008/09).
Many children's savings accounts offer incentives to children such as free toys, but what is more important is the rate of interest being paid.
Investment Savings: A number of child savings investment plan providers provide plans which are marketed to children and often allow regular investment from typically £25 per month.