Saving for children: the friendly option

Offered by a number of friendly societies, children’s savings bonds offer a relatively low level of saving – of up to £25 a month for between ten and 25 years – and generally invest in with-profits funds. They offer tax breaks as long as you fulfil the criteria of regular payments and the minimum term; in return, the child will receive a guaranteed minimum amount, plus regular annual bonuses that are added to the value of the policy. However, it’s worth remembering that the value of these investments can go down as well as up.