You can save tax-free for any child with a Scottish Friendly Child Bond. It’s tax-free as it’s a friendly society savings plan, which means that under current legislation it grows free of income or capital gains tax. It is a good way for parents, grandparents, family members and friends to make a substantial financial difference when the kids are older.

Basically the Child Bond is a with-profits investment plan: It invests for long-term growth as well as an element of security, in stocks and shares, fixed interest funds and cash

Money grows through the addition of potential yearly bonuses and at the point where the bond matures there’s a tax-free payout. The value of bonuses depends on how much profit we make and how it is distributed by us. Please note that bonuses are not guaranteed.

The Child Bond lasts for a minimum of ten years, but you can invest for longer should you wish – perhaps to coincide with an 18th or 21st birthday. You can save either monthly, annually or with a lump sum payment.It really is completely up to you. Please note if the plan is cashed in prior to the end of the term, the amount the child will get back may be less than the amount paid in.

If you select the monthly option, you can begin saving from as little as £10 a month – up to a maximum of £25 a month. Or you can make yearly payments of up to £270 a year.

You can also pay all of the premiums in one go through our lump sum funding plan. If you invest the maximum amount of £2,340 for a 10 year period, this actually invests £270 a year into the Child Bond – making £2,700. The minimum lump sum of £1,040 provides £120 a year for 10 years – a total of £1,200. This provides a means for you to pay all your premiums in one go and is particularly popular with grandparents who like the reassurance of knowing all premiums for the full term of the plan are taken care of.

Life cover is also included with this plan so you should consider if this is suitable for your financial needs.