Looking to amass a princely sum? The AIC publishes children's saving scheme and junior ISA information

– For a saving for children factsheet, and information on children’s savings schemes, visit www.theaic.co.uk.

In the absence of a royal nest egg, and given the varying budgets of new parents, the Association of Investment Companies (AIC) has published information on children’s investment schemes and Junior ISAs, including scheme charges and minimum monthly and lump sum investments. This information is available on the AIC’s website, www.theaic.co.uk, and the AIC also produces a saving for children factsheet.

Ian Sayers, Director General, Association of Investment Companies (AIC) said: “Investment companies are a very popular way to invest for children and have been building nest eggs for decades. With professional fund management, the ability to gear to enhance returns, an independent Board to represent shareholder interests, and a range of sectors and risk profiles to choose from, investment companies can be a useful way to tap into the long-term potential of the stockmarket.”

How to get started

You can invest on behalf of a child through any investment company saving and investment scheme – some management companies have plans specifically for children. You can choose to hold company shares either in your own name and designate on the application form that you are holding them on behalf of a child (by adding the child’s name or initials to the form) or you can hold company shares in a bare trust for the benefit of the child.

Holding company shares in a designated account means that the money remains yours but is designated for the child. You have the flexibility to decide when to hand the money over to the child, but you will have to account for any tax arising. By contrast, holding shares in a bare trust means that the bare trustee’s name is on the share certificate as the legal owner and the child is a beneficial owner. The child will have access to the proceeds of the investment on reaching the age of 18 when the shares can be registered in their name.

Children’s savings schemes (click image to increase size)

AIC Children's Savings Schemes

Junior ISAs (Click image to increase size)

AIC Junior ISAs

* Stamp duty of 0.5% also applies, and investors also need to look at individual investment company ongoing charges, which are in addition to buying and selling costs and scheme administration charges.

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