The ‘green’ options

There is a range of stock market-linked investment schemes aimed at those keen to save for a child's future. However, if you want your child's money to be invested in businesses with a positive record on the environment or human rights, there are also ‘green’ options available for you to choose.

Ethical child trust fund accounts are available to those parents whose children are benefiting from the Government's ‘baby bond’ scheme. Under the child trust fund (CTF) programme, every baby born after 31 August 2002, receives at least £250 in the form of a voucher from the Government to get their account started. Parents, grandparents and others can between them put in up to £1,200 a year to help boost the fund's value, and all income and gains are tax-free.

However, the millions of children born before September 2002 are locked out of CTFs. So what are the options for parents and grandparents looking to set up a non-CTF investment for an older child?

There are a number of ethical unit trusts and investment trusts aimed specifically at children. However, you could look beyond products targeted at youngsters, bearing in mind that an investment such as a unit trust can be held on behalf of a child and ‘designated’ with his or her name or initials.

In most instances, it may be appropriate to have some exposure to the stock market when it comes to investing over a longer period (perhaps until the child has reached the age of 18). Historically, over the longer term, shares have almost always produced a better return than savings accounts, although you need to consider that past performance is no guarantee to future returns.

If you would like more information, please e-mail or contact us for further information.

The value of units can go down as well as up. Past performance is no guarantee of future returns. Levels and bases of, and reliefs from, taxation are subject to change.
Article date: March 2007