Vision Tax Exempt Savings Plan for Children

Tax exempt savings for children

Could your child use a tax exempt lump sum ten years from now?

A Vision Tax Exempt Savings Plan for Children lets you save £25 a month tax exempt for any child under the age of 16 who is a UK resident.

Tax exempt savings plans are only available from friendly societies. Vision Tax Exempt Savings Plan for Children is provided by Engage Mutual Assurance, one of the UK’s leading mutual friendly societies.

Adults can save with a Vision Tax Exempt Savings Plan as well.

Overview

Important info

Useful docs

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• You know how quickly they grow - and the sooner you start saving, the sooner your child’s plan will have the potential to grow with them.

  You can save £25 a month on behalf of a child in our Vision Tax Exempt Savings Plan for Children. The minimum term of the plan is 10 years. It can also be taken out to mature when the child reaches age 18 or 21, so long as it runs for at least 10 years.

  • It is a friendly society, tax exempt regular savings plan
  • Any of the growth in the plan is tax free - provided it runs for at least 10 years
  • The money remains invested until the plan is cashed in
  • You can save £25 a month on behalf of a child or grandchild
  • You can invest in the Engage Mutual With Profit Sub Fund for a minimum of 10 years
  • It is available to any child provided, they do not already have a tax exempt friendly society savings plan

  The plan is taken out by a parent or legal guardian on behalf of the child. When the child reaches age 16, the ownership of the plan passes to them.

  We recommend that you read the Important Information in the next Tab.

  Charges apply.

• What is Vision Tax Exempt Savings Plan for Children?

  It’s a friendly society tax exempt savings policy. This means that there’s no tax on any growth in your plan. In addition, the lump sum that’s paid out at the end is tax free.

  It’s available for children under 16 who are UK residents. So you can shelter some savings for them from tax - and they can enjoy a tax free cash lump sum when the plan matures.

  Remember, inflation will reduce the buying power of the lump sum and affect what can be bought in the future. The tax treatment of the plan could change in the future.

  How much can I pay in?

  You can save £25 a month. Payments must be made by Direct Debit.

  I already have a Child Trust Fund, can I have a Vision Tax Exempt Savings Plan for Children as well?

  Yes, your child’s tax exempt savings allowance is in addition to the Child Trust Fund allowance – so you can save into both plans.

  Where is the money invested?

  The money is invested in the Engage Mutual With Profits Sub Fund. This invests in a mix of assets such as shares, commodities, property, currency, cash and other structured investments. The Sub Fund may also invest directly in fixed interest securities. The underlying value of any investment may fall as well as rise.

  What is the interest rate on Vision Tax Exempt Savings Plan for Children?

  The plan doesn’t pay interest. What the child gets back depends on the performance of the underlying investments held in the fund. Investment performance cannot be guaranteed.

  Is there a bonus?

  Any bonuses are added to the plan and these gradually increase the value of the plan. A final bonus may be added when the plan is cashed in. You should bear in mind that future bonuses depend on investment performance and are not guaranteed.

  What happens at the end of the Plan?

  If all the premiums due have been paid, there are 28 days in which to cash in the plan to ensure your child will get back at least what has been paid in.

  If the child will be under 16 at the end of the term, we’ll write to the parent or guardian to tell them what options are available. If the child will be 16 or over at the end of the term, we’ll send the information to them.

  If the policy is cashed in outside of the guarantee period the child may get back less than has been invested.

  Can I put a lump sum into a Vision Tax Exempt Savings Plan for Children?

  No, Vision Tax Exempt Savings Plan for Children is for regular savings only.

  What are the charges?

  • There is a policy fee of £1 a month. This is deducted from premiums before they are invested.
  • There is an annual management charge. This is 1.25% of the policy value and is deducted on a weekly basis.
  • In year one, there is a charge of 50% of each premium paid in. This is deducted before premiums are invested.
  • There is a life cover charge which depends on the child’s age, the amount of life cover and the unit value. There’s more information in the Key Features.

  The charges Engage make may increase.

  Are there any penalties if the Plan is closed early?

  No, there are no early closure penalties. However please note:

  • If the plan is cashed in before one year's premiums have been paid, the child will not get anything back.
  • If, within 10 years, the policy is closed or premiums stop, income tax may be payable if the final value of the policy exceeds the premiums paid.
  • A Market Value Reduction may be applied to the lump sum on surrender. This would reduce the payout to the child.
  • If the policy is cashed in during the early years, the child is unlikely to get back as much as has been paid in.
  • It’s also important to be aware that if you close the plan outside of the guarantee period, you could get back less than you paid in.

  Can I pay by cheque or standing order?

  No, your monthly payments can only be made by Direct Debit.

  I’m not the parent or guardian of the child. Can I pay the premiums for the child’s plan?

  Yes. You don’t have to be the parent or guardian to pay the premiums.

  What happens to the plan once the child reaches 16?

  Once the child reaches age 16, control of the plan will revert to the child and any letters, statements or other communications will be addressed to them.

  Can I save more than one Vision Tax Exempt Savings Plan for Children?

  No, the total savings amount for friendly society tax exempt savings plans held by your child with Engage or any other friendly society, cannot exceed £25 per month.

• Key Features of Vision Tax Exempt Savings Plan for Children (pdf – opens in new window)

  Policy Conditions of Vision Tax Exempt Savings Plan (pdf – opens in new window)

  Key Facts of Vision Tax Exempt Savings Plan (pdf – opens in new window)

  Consumer Friendly PPFM (pdf – opens in new window) (pdf – opens in new window)

• There are three ways to apply:

  Online

  Apply online

  Request a pack

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  By phone

  Call us on 0800 130 0132

  Lines are open 8am-8pm Monday to Friday and 9am-4pm on Saturdays.

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  In branch

  Find your nearest branch.

The Tax treatment of the Vision TESP may change in the future.

Clydesdale Bank acts as an introducer for the Vision Tax Exempt Savings Plan, provided by Engage Mutual Assurance.

For your security, calls may be monitored or recorded.

The Vision Tax Exempt Savings Plan for Children is only available to children aged 0 - 15 years inclusive.

The underlying value of any investment may fall as well as rise.

Clydesdale Bank PLC is a member of the Financial Services Compensation Scheme established under the Financial Services and Markets Act 2000. You may be entitled to compensation from the Scheme if we cannot meet our obligations. This depends on the type of business and the circumstances of the claim.

In respect of insurances and insurance advice and arranging covered by the Scheme, payments are limited to 90% of the claim with no upper limit. For compulsory insurances 100% of the claim is covered by the Scheme with no upper limit. Further details of the Scheme are available from us on request or from the Financial Services Compensation Scheme: http://www.fscs.org.uk/ (opens in new window) or Financial Services Compensation Scheme, 7th Floor, Lloyds Chambers, Portsoken Street, London, E1 8BN.

Vision Tax Exempt Savings Plan for Children is provided by Engage Mutual Assurance, Hornbeam Park Avenue, Harrogate, HG2 8XE tel: 01423 855000.

Engage Mutual Assurance is a trading name of Homeowners Friendly Society Limited (HFSL), Registered and Incorporated under the Friendly Societies Act 1992, Reg. No.964F. Authorised and regulated by the Financial Services Authority (FSA). HFSL’s FSA Registration number is 110072. You can check this on the FSA’s Register by visiting the FSA’s website www.fsa.gov.uk/register or by contacting the FSA on 0845 606 1234.