Investing for children

There are many ways to invest on behalf of a child with M&G.

Read our Q&A to find out more about CTF transfers

CTF Transfer Q&A

M&G Junior ISA

Find out more about The M&G Junior ISA.

Find out more

Investing on a child’s behalf

Find out more about investing on behalf of a child outside of The M&G Junior ISA, including the tax implications of and further details on bare trusts.

Read our ‘Investing in your child’s future brochure

The first and easiest option to choose is the tax-efficient Junior ISA, if the child is eligible. Junior ISAs are flexible,  tax-efficient and can only be accessed by the child when they reach the age of 18.

Changes to CTF regulations now mean investors can choose to transfer existing Child Trust Funds into Junior ISAs. For further insight into these changes in regulations and for more information about investing in The M&G Junior ISA take a look at our Questions and Answers page

To find out how to transfer a CTF into an M&G Junior ISA read our 3-step guide to CTF transfers

Junior ISA tax advantages may depend on your individual circumstances and tax rules may change in the future.

Your existing CTF provider may make a charge for carrying out the transfer. We carry out all the paperwork to transfer your CTF to M&G free of charge. Whilst your investment is being transferred it will be out of the market for a short period of time and will not lose or gain in value.

If your child does not qualify because they have already used their Junior ISA allowance for the tax year or they have a CTF that they do not wish to transfer into a Junior ISA, then there are several other ways to access the long-term growth potential of the M&G fund range. This can be done by:

  • investing in the child’s own name, if they are over 18 years of age
  • investing in your name, with a designation for the child, to transfer to their name when they reach 18 years of age
  • creating a bare trust
  • However as these options are not tax-efficient, investors need to fully understand their obligations to HM Revenue & Customs (HMRC).

    We are unable to give financial advice. If you are unsure about the suitability of your investment, speak to your financial adviser. The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested.

Investing in the child’s own name

Children can hold shares in a fund within The M&G Savings Plan (or directly in an M&G OEIC) in their own name, once they reach the age of 18.

Investing in your name, with a designation for the child

For younger children, shares can be registered in the name of an adult but designated for the child by adding, for example, their initials to the ‘designation’ field on the application form.  Once the child reaches the age of 18 the shares can be transferred into their name.

Designated accounts are not a legally binding arrangement.  If you are looking to add a more formal status (and legal standing) to an investment held on behalf of a child, you could choose to set up a bare trust.

Creating a bare trust

A bare trust is a formal and legally binding way of registering an investment you have made for someone else.

At M&G we believe that in order to avoid any potential tax issues it is wisest to make a formal declaration of trust to HMRC.  This can be arranged through a professional adviser, such as a solicitor, who normally draws up deeds.

Further information on investing on behalf of a child outside The M&G Junior ISA, including tax implications and further details on bare trusts, is available in our Investing for your Child’s Future brochure.


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