Saving made simple
Our Child's Tax-Exempt Savings Plan is a simple way to provide a meaningful financial gift for your child or grandchild.
Whether you're a parent, grandparent, or family friend, it's a smart way to save for their future, with guarantees and growth potential built in.
A Child's Tax-Exempt Savings Plan lets you save money for a child without paying tax on your premiums or the growth, helping your savings grow faster.
These plans are offered by Friendly Societies, and to keep the tax benefits, HMRC sets limits on how much you can save each year. You must also be a UK resident to apply.
Lump sum guaranteed - Give your child a secure start with a guaranteed payout at the end of the 10-year term.
With-profits potential - Enjoy potential growth through our with-profits fund (bonuses may be added at the end of 10-year term) depending on fund performance.
Additional tax-free saving - Use this plan alongside your child’s Junior ISA allowance to save even more, tax-free.
You’ll choose a monthly amount between £9 (£100 yearly) and £25 (£270 yearly)* that stays fixed for the full 10 years.
Your payments are invested in a fund made up of bonds, stocks, and property to help your savings grow.
*HMRC limits how much you can pay each year into a Friendly Society tax-exempt savings plan for a child.
At a glance
Save a fixed monthly amount for your child for 10 years
Choose a monthly payment between £9 and £25
Guaranteed lump sum for your child
Additional bonuses may apply depending on fund performance
Tax-free lump sum
This product is protected by the Financial Services Compensation Scheme (FSCS) up to 100% of your claim.
Tax-Exempt
Additional tax-free allowance on top of their annual Junior ISA allowance.
Tax-free bonuses
You could receive extra bonuses depending on the fund’s performance — all free from tax.
Guaranteed lump sum
Making regular payments over a 10-year period, they'll receive a guaranteed minimum return.
Please review the documents below to confirm that the Child's Tax-Exempt Savings Plan is suitable for you.
This table shows how different monthly contributions affect the overall investment and the guaranteed return after 10 years.
Monthly (or Yearly) premium*: The fixed amount you choose to pay each month (or year).
Total investment (10 Years): The total amount you’ll contribute over the full 10-year period.
Minimum maturity value: The guaranteed lump sum your child or grandchild will receive at the end of the 10 years, regardless of investment performance.
For example, if you contribute £18.50 per month, your total investment over 10 years will be £2,000, and the child is guaranteed to receive at least £2,235 at maturity.
*A higher monthly premium will lead to a larger guaranteed payout.
| Monthly premium | Yearly premium | Total investment (10 Years) | Minimum maturity value |
| £9 | £100 | £1,000 | £1,085 |
| £14 | £150 | £1,500 | £1,690 |
| £18.50 | £200 | £2,000 | £2,235 |
| £20.50 | £220 | £2,220 | £2,475 |
| £25 | £270 | £2,700 | £3,020 |
At the end of the 10 year term, your child or grandchild will receive their maturity value.
This comprises of:
- The guaranteed sum assured (outlined in the 10-Year Savings Summary).
- Any annual bonuses that have been declared during the term.
- There may also be a terminal bonus.
Bonuses will be declared on a basis recommended by the Actuary, as a result of the investment performance and annual valuation.
You need to be aged 18 or over to open a Child’s Tax-Exempt Savings Plan, making it easy for parents, grandparents, family members, or even close friends to start saving for a child’s future.
The child will needs to be under 18 and living in the UK.
Important: HMRC sets a yearly limit on how much can be paid into all tax-exempt savings plans for the same child.
So, if different family members or friends are saving for the child, the combined premiums must stay within the limit.
HMRC sets the maximum amount you can pay each year into tax exempt savings plans.
With a minimum of £9 per month (or £100 per year) and a maximum of £25 per month (or £270 per year).
These limits apply to the individual plan. However, if multiple plans are set up for the same child by family or friends, the total paid into all plans combined should not exceed the HMRC annual limit (£25 per month or £270 per year) to keep the tax benefits.
Example:
A parent opens a savings plan and chooses to pay £9 a month. At the same time, a grandparent opens a separate plan for the same child and pays £14 a month.
Both plans can run at the same time without any issues because together they’re saving £23 a month for the child, which is still below the maximum limit of £25 per month.
You can pay your premiums easily with a monthly standing order. We’ll include all the details you need to set this up in your welcome pack.
The Child's Tax Exempt Savings Plan has a fixed term of 10 years.
You cannot make part withdrawals, nor change the premium amount or term.
If you miss a premium payment, you have 30 days to make it. After this period, the policy will be closed, and if applicable, any surrender value will be paid to you.
If you stop paying premiums and surrender the plan, but please note:
- You will lose the guaranteed minimum return.
- You may get back less than the total amount paid, especially in the early years.
- If you surrender the plan within the first year, you will receive nothing.
Need to speak to someone about our Child's Tax Exempt Savings Plan?
Our friendly customer service team is available to discuss any questions.
or email insure@unitymutual.co.uk
If you need financial advice
If you're unsure whether a product is right for you, it's worth speaking to an Independent Financial Advisor (IFA).
You can find a local advisor at unbiased.co.uk. Keep in mind that financial advice may come with a fee, so be sure to ask about costs before receiving advice.
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