So how does it all work?
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Affordable monthly saving
Saving for your child's future doesn't have to cost much. You can save £25 a month, that's only £5.76 per week, and you can take out a plan for your child anytime before their 16th birthday, even from the day they are born.
Contributions can be paid monthly by Direct Debit from your Bank or Building Society. If you are a Royal Mail employee or if your employer allows, contributions can be paid directly from your pay, whether you're paid weekly or monthly.
And with more grandparents taking an active interest in supporting their grandchildren, grandparents can even take out a plan on their behalf.
Choose how long to save
You can choose how long you want to make contributions into the plan, which will determine when the plan will end for your child.
The length of time you choose to save for the child is called the term of the plan and can be anything from a minimum of 10 to a maximum of 25 years, providing the end of term falls after the child's 16th birthday.
Please be aware that all money paid into the plan immediately becomes the child's and contributions should be seen as a gift to the child. Once paid contributions cannot be returned to the person who paid them.
The potential for growth
The contributions you make will be invested in the POIS Flexible Growth Fund, which aims to achieve long term growth, while spreading risk across a range of investments. It invests mainly in shares, both UK and overseas, along with fixed interest investments, such as Government gilts, and property.
Please Note: The Children's Tax Exempt Plan is not designed to be a short term savings plan. As the contributions you make are invested in a fund which holds assets including stocks and shares that can vary in price from day to day, the value of the plan may fall as well as rise and your child may get back less than you have paid in. You should also be aware that inflation will reduce what the child can buy in the future with the money paid into the plan.
For more information about the different types of investments and the POIS Flexible Growth Fund please see our Fund Information.
It's tax free
The great thing about this type of savings plan is that the final payment your child receives will be free of Capital Gains Tax and Income Tax. Only a Friendly Society can give you the additional tax advantages through this type of regular premium savings plan, under which we don't have to pay tax on the investments in the fund, except for the tax automatically deducted from UK share dividends which we can't reclaim. Because of the favourable tax treatment, the Government has set a maximum limit of £25 per month for a child. However you can make contributions to plans for more than one child if you want.
Please Note: You should be aware that tax rules might change in the future and depend on individual circumstances.
Extra benefits at no additional cost
By taking out a Children's Tax Exempt Plan, your child automatically becomes a member of Foresters Friendly Society. And although they may not take advantage straight away, they'll have access to a range of brilliant extras that can give them support and assistance when they need it, including:
Financial grants for education - discretionary grants for those who need support with things like higher education.
Financial Support - discretionary grants are available for members to help with support during difficult times.
The membership benefits we provide aren't regulated and are regularly reviewed by us to ensure they are relevant to our members.
Find out more about the Extra benefits available on Foresters Friendly Society's website.
Before applying for the Children's Tax Exempt Plan, please read the Key Information Document and Important Information which explain how the plan works, its aims, the commitment you will need to make and the risks involved. It will help you decide if it's suitable for you.
If you have any questions, please contact us on 0800 622 417 or at email@example.com.