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It's never easy launching into adult life and taking on all the responsibilities. But one thing is certain – a cash injection can go a long way. Whether you're looking to further their education, let them see the world, help set up a home, or buy their first car - a cash lump sum can give your child the boost they need to get started - even better when it's “tax smart.”
The Children’s Mutual University Bond is what we call a
'Tax Smart University Savings Plan'. It enables you to start saving on behalf of your child, so that they can receive a tax-free lump sum just when they need it most - what's more it' s flexible, affordable and very easy to set up.
- You can decide when you want the child to receive the benefits - just select the likely term of the University course usually 3 or 4 years, or it is ideal as an 18th, 21st or 25th birthday gift.
- Anyone can take out a Children's University Bond on behalf of a child - parents, grandparents, godparents, relatives or friends.
- You can make regular payments from as little as £40 per month or £480 per year
with up to £25 a month tax free.
As one of the UK 's leading Friendly Societies, The Children's Mutual has been at the forefront of the savings and investment market since 1881. It has many years' experience helping parents to provide university provision for their children. They aim for solid, sustained growth by investing your premiums in the Tunbridge Wells Equitable With-Profits Life and Endowment Fund, which should outperform a building society deposit account over the long term. But please note that this plan does not offer the same level of security as a Bank or Building Society deposit account. This kind of savings plan is designed for people who prefer to invest in a broad range of stock-market linked investments, in return for the potential for real capital growth. In doing so, you understand that you accept the risk of some capital loss, although you will receive the guaranteed minimum return at the end of the savings term.
As a Mutual Society, when you take out a Children's University Bond you become a member. Its members own the company and so you will always share in its success.
How does the plan work?
Let's assume the child whose future you want to invest for will be starting a typical three year undergraduate degree course at age 18. They'll need funds available for each year of their course, so the product you choose to help you build up those funds should ideally pay out three times. The With-Profits University Bond meets this objective by bringing together three (or sometimes four) With-Profits Savings Plans within one wrapper. It can include more savings plans than this if you want to fund for a longer course.
Although each plan could stand on its own - and in law is separate - the way they've been brought together in the University Bond gives you a convenient arrangement which builds up funds for the child, and then releases them when they're needed. The arrangement also allows you to invest part of your savings in a way which is not subject to income tax and capital gains tax under current legislation, however, tax rules can, and do, change from time to time. This is called tax-free saving, and is open exclusively to members of friendly societies.
Please note that levels, bases and relief's from taxation are subject to change and that the level of bonuses depends on the performance of the company and cannot be guaranteed. Past performance is no guarantee of future capital return; the value of investments can go up as well as down. You may not get back the full amount invested, although you will receive at least the minimum guaranteed return. The value of this policy depends on how much profit the company/fund makes, and how they distribute this profit.
See our special offer for the University Bond at the bottom of the page. Plus as an additional bonus everyone who starts a Children's University Bond receives our “University Planning Guide” completely free.
Yours sincerely,
Gary Brown
Managing Partner
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