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Tools & Guides

It's brilliant to be able to give your child or grandchild a helping hand with their future plans and savings

Tools & Guides

Helping children to learn about money and saving

In this section there is a range of guides covering:

Teaching children about money

If you are short of time and looking for some quick ideas to help encourage your children to start thinking about managing money in everyday situations, try our 4 step guide.

4 easy steps to help children understand the value of money

Children and tax

You may think, as many people do, that children don't pay tax. In fact, children are taxed in the same way as adults. They can currently earn up to £10,000 a year tax-free - through jobs, savings and investments.

Most children won't use up their allowance, so the interest on their savings is typically tax-free. But what many people forget is the fact that any interest earned on money given to a child by a parent is only tax-free up to £100 interest, per parent or step-parent. Where a child earns more than £100 in interest in a year, the child's earnings are taxed at the parent's tax rate.

Saving for children with a friendly society keeps things simple because, providing the conditions of the plan are met, bonus payments are tax-free.

Under current legislation, each person (including children) can save up to £25 a month in a Friendly Society Tax Exempt Savings Plan. There is no Capital Gains Tax or Income Tax to pay when you take out a child savings plan through a Friendly Society. To ensure the tax-efficiency of the plan, you must continue your monthly contributions for your chosen term.  If this isn't the case, any gains the plan makes may be subject to tax. Tax rules may change and depend on individual circumstances.  

What is Income Tax?

Income tax is a tax paid on income. It is paid by employees and people who are self-employed. It may also be payable if you aren't working if, for example, you have an income from a pension or savings. There is no minimum age at which a person becomes liable to pay income tax. What matters is the amount of your taxable income. If this is below a certain level, no tax is payable.

Income on which tax has to be paid includes most savings income for shares or trusts. 

What is Capital Gains Tax?

Capital Gains Tax is a tax on the gain (or profit) you make when you sell, give away or otherwise dispose of something.

 

Saving Squad

The UK's mutual insurers, including Foresters Friendly Society, are working together to encourage the next generation of savers, with the launch of a free, fun website targeted at seven to eleven year olds.

Saving Squad allows children to get their hands dirty in 'real life' money spending scenarios. For example, children can earn points to either save in the virtual bank where they'll earn interest - or to spend in the 'Get Stuff!' shop.

Savings Squad

Designed by educational experts on behalf of the Association of Financial Mutuals (AFM), www.savingsquad.org encourages a healthy attitude toward money and savings by bringing money to life for the next generation through with fun educational games, helping children to improve their numeracy skills and understand the benefits of saving money.

The site features tailor-made sections for children, teachers, parents and carers which provide a well-rounded approach to learning about money at home, at school and at play.

Get started with Saving Squad