The Junior Bond

Any adult aged 18 or over can open a Junior Bond for any child aged 15 and under (as long as the child does not already have one or is not using their £25pm or £270 a year allowance to the full).

Absolutely! And for any other child too: relatives, god-children, family friends. Each child must have their own bond.

Compare some of our child savings and investment products here.

The initial payment term must be between 10 and 25 years as this is a long-term commitment to saving. You can decide the payment term when you apply.

You can choose to invest between £15 and £25 a month by regular Direct Debit.

Alternatively, you can invest between a £165 and £270 a year. Please call us for more details.

Please note any gift options will apply to monthly payment options only.

No, the payments are fixed at the start.

You have 30 days to cancel the Junior Bond. If you wish to cancel, then please complete the cancellation notice included in your Welcome Pack. Any money you have paid in will be returned to you in full.

A Junior Bond has no cash-in value in its first year. If you change your mind after the end of the cancellation period, you will not get anything back, and if you cancel between years 2 and 10 you will receive the account value less a £50 charge. Tax may also be payable.

The Junior Bond is a Tax Exempt Savings Plan (TESP), into which the government allows up to £25 a month, or £270 a year, to be saved.

The Junior Bond is invested in a special tax-exempt fund, although income received by the fund may be taxed before we receive it. The final sum the child receives will be free from Income Tax and Capital Gains Tax as long as you make payments for at least 10 years.

Please remember that tax advantages depend on individual circumstances, and the tax treatment of the Junior Bond may change in the future.

You can also choose to invest in either the Sovereign Fund or the Family Charities Ethical Exempt Fund. Click here to read more about the fund options available.

An initial set up charge of £60 will be taken from the first year’s payments. We also apply an annual management charge of 1.5% of the fund value.

A charge will also be taken for the child's life cover whenever the current value of the Junior Bond is lower than the sum assured. This charge is taken yearly, on the anniversary of the Bond, by cashing in units. The charge we make for life cover depends on the child’s age when we take the charge.

The Sovereign Fund may also have certain expenses deducted directly from it because it can invest in other funds and alternative investments. These charges are estimated to be no greater than 0.2% of the value of the fund each year.

If you cancel the plan between years 2 and 10 you will receive the account value less a £50 charge. Tax may also be payable.

We will send you a statement every year, so you can keep track of the plan. This is sent shortly after the anniversary of the Junior Bond start date. Once the child is 18 we will start to send the statements and any other correspondence directly to them.

At the end of the payment term there are four choices, which we will remind you of nearer the time. These are:

• Continue to make payments. Either the parent (if the child is under 18) or the child (if they are over 18) can opt to extend the payment term.
• Leave the money invested in a tax-exempt fund and make no more payments
• Take some of the money and leave the rest invested
• Take all of the money

Before the child reaches 18, the policy can only be cashed in on the instruction of the child's nominated parent or legal guardian.

Once the child is 18, only the child can cash in the policy. Neither the child nor their parent/guardian can cash in the policy without your permission (as the payer) before the end of the payment term selected by you when you opened the policy.