Child Savings

Investing for the next generation

It’s natural to want to provide for your child financially. We can help.

There are many ways you can save and invest for children. From a simple savings account to a pension. It’s something other family members often want to get involved in too and the earlier you start the more your child could stand to gain.

At Alliance Trust Savings you have a choice of three different investment-based Accounts to suit your needs. To help you decide, here’s a quick overview.

Junior ISA Child SIPP First Steps IDA
Is it tax-efficient? Yes Yes No
How much can I invest? Up to £4,368 for the 2019/2020 tax year Up to £2,880* for the 2019/2020 tax year No limits
Can I transfer in other Accounts? Yes Yes Yes
Who controls the Account? Named adult, until the child reaches age 18 Named adult, until the child reaches age 18 Account holder (you, the adult)

*This will result in £3,600 maximum contribution after tax relief

Important Information

Remember the value of your child’s investments can go down as well as up and they may get back less than the amount you invested. All investments carry an element of risk which may differ significantly.

Tax rules may change in the future without notice and taxation will depend on your child’s personal circumstances.

A SIPP requires active management and investment expertise. Your child cannot normally take any money out of it until they reach age 55 and you and they (when they reach 18) should make sure their investments are reviewed regularly. If you are unsure as to the suitability of a SIPP or any particular investment you might be considering for your child, you should speak to a financial adviser.


Is it right for me?

  • A Junior ISA may be suitable if you are comfortable that the child can access their money at age 18.
  • A Child SIPP may be suitable if you want to get your child’s retirement savings off to a head start and are happy for them to control their SIPP from age 18.
  • A First Step Investment Dealing Account may be suitable if you want to stay in control of your child’s savings until you are ready to give them access. You are comfortable to forgo the tax advantages of a Junior ISA or Child SIPP.

Why invest with Alliance Trust Savings?

  • Real-time trading in UK-listed securities
  • Regular, monthly investing for just £1.50 a trade (Terms and Conditions apply)
  • Minimum investment of just £50

FAQs AND RESOURCES

Who can open a Child Account

Who can open a Junior ISA?

You can open a Junior ISA If you are 18 or over, resident in the UK and the parent or guardian of the child. A child aged 16 to 18 can also open a Junior ISA.

Once the Account is open, anyone can pay in providing they are a registered donor and pass security checks.

Any amount can be paid in.

The maximum amount you can pay in for the 2019/2020 tax year is £4,368.

Who can open a Child SIPP?

You can open a Child SIPP if you are 18 or over, resident in the UK and the parent or guardian of the child.

Once the Account is open, anyone can pay in providing they are a registered donor and pass security checks.

Any amount can be paid in.

The maximum amount you can invest for the 2019/2020 tax year is £3,600 including tax relief.

Who can open a First Steps IDA?

You can open a First Steps IDA If you are 18 or over, resident in the UK. You don’t have to be the parent or guardian of the child to open a First Steps IDA.

Once the Account is open, anyone can pay in providing they are a registered donor and pass security checks.

Any amount can be paid in.

There is no maximum payment amount.

If the Account is to be held in a Bare Trust you will have to tell us about this. You will need to send us the original or certified copies of your Bare Trust documents with your application. The Account will also incur our Supplementary Account charge. Please read our Charges Guide for the details on this.

Opening a Child Account

How do I open a Child Account?

If you are interested in opening an Alliance Trust Savings Account, please speak to your financial adviser.

If you don’t have a financial adviser, you can locate one near you at unbiased.co.uk.

Paying in

What payment methods do you accept?

Debit card, Direct Debit (for regular payments), transfer from your bank account and cheque.

How do I pay money into my Account?

We’ll send you a password and Personal ID to use on our secure online service, where you (or your financial adviser) can manage your Account, including the payments you make. If you prefer, you can also give us payment instructions over the phone or by post. For the detail of how to pay using the different methods we offer, read our Platform Guide which you can find in Forms and Literature.

Transferring in

Can I transfer a Junior ISA to Alliance Trust Savings?

You can transfer both Junior ISAs from other providers and Child Trust Funds into your Junior ISA with us. You may be out of the market for a time during the transfer.

Can I transfer a Child SIPP to Alliance Trust Savings?

You may be able to transfer child savings from another registered pension scheme to your Child SIPP with us. You may be out of the market for a time during the transfer.

Can I transfer a First Steps IDA to Alliance Trust Savings?

You can transfer investments from elsewhere without selling them first so long as we offer them through our First Steps IDA.

How do I transfer an Account elsewhere to you?

If you are interested in transferring to Alliance Trust Savings, please speak to your financial adviser.

If you don’t have a financial adviser, you can locate one near you at unbiased.co.uk.

How long can I expect that it will take to complete a transfer?

If you are transferring an ISA or IDA it can take up to 30 working days. If you are transferring a SIPP it can take up to 60 working days.

How do I make a transfer to another provider?

If you would like to transfer your Account away from us to another provider you will need to contact them and complete their transfer forms. They will then forward the forms to us to action.

Do charges apply to transfer my Account in or away from you?

We don’t charge for transfers in or transfers out. Please refer to our Charges Guide for more information.

Control

Who does the Junior ISA belong to?

The child. They can control the investments from age 16 but can’t access them until age of 18 when the Junior ISA becomes an adult ISA in their name.

Who does the Child SIPP belong to?

The child. They can control the investments from age 18 but, based on current tax and pension rules, won’t be able to access them until they are at least 55.

Who does the First Steps IDA belong to?

The adult who opens the Account. You can think of a First Steps IDA as a way to hold and track investments you are making for a child separately from your own.

Charges

What are the charges?

We charge flat Account fees for our platform services. These cover the basic ongoing cost to us of managing an Account for you and charges for other services you may ask us to provide - buying and selling investments for example. You can download our Charges Guide in Forms and Literature.

Is there a price difference to trade online or by post?

It’s cheaper to trade online, £9.99 a trade compared to £50 by phone or post. You can also benefit from a loyalty discount for online or telephone trading after 5 years. Full details can be found in our Charges Guide which can be found in Forms and Literature.

Tax

Are there any Tax advantages to Junior ISAs?

There is no tax to pay on income or investment growth inside a Junior ISA.

Are there any Tax advantages to Child SIPPs?

There is no tax to pay on income or investment growth inside a Child SIPP.

Payments in also benefit from tax relief. To reach the £3,600 maximum payment in each year, only £2,880 has to be paid in directly. The rest (£720) is paid in as tax relief which we claim on your behalf.

Are there any Tax advantages to First Steps IDAs?

There are no tax advantages.

Keeping track

How often will I get a valuation and statement?

You will receive a valuation and statement covering all of your Accounts with us four times a year and you'll be able to check the current value of your Accounts online at any time by logging in to our secure online service.

You can find more Frequently Asked Questions here.

Helpful resources

To view all our forms, Account documents and helpful guides, click on the button below:

View Forms and Literature

Alliance Trust Savings Limited is registered in Scotland No. SC 98767, registered office, PO Box 164, 8 West Marketgait, Dundee DD1 9YP; is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, firm reference number 116115. Alliance Trust Savings Limited gives no financial or investment advice. ‘Alliance Trust Savings’, ‘ATS’ and 'AT Savings' are all brand names of Alliance Trust Savings Limited together with the ‘Alliance Trust Savings’ logo are owned by and used with the permission of Alliance Trust PLC, the previous owner of Alliance Trust Savings Limited.