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Investing for your child’s future

sponsored by BMO ITs |

The future is exciting. Nobody knows for certain which path they will take – everybody has different goals they want to achieve and different bucket lists to tick off. So it is only natural that many parents want to provide their children with the best possible start in life. Smart investing could help prepare your child(ren) for a promising future by giving them a head start in reaching some of life’s major milestones: 

  • Higher education
  • First home
  • New car
  • Trip of a lifetime
  • Wedding

First things first

There are many different saving and investment options out there, and it is not a case of one size fits all. Important considerations include interest rates, fees and ease of withdrawal. The age of your children is also important – how much time do you have to potentially grow a substantial pot of money, and how much risk are you willing to take? 

Could any of your children already own a Child Trust Fund?

If you have a child who was born between September 2002 and January 2011, they likely have a Child Trust Fund. These were set up by the Government as a tax-efficient way of investing for children over the long term. 

Although this scheme is now closed (replaced by the Junior ISA), any accounts opened during the period above are still active and you can keep paying up to £4,368 a year until your child’s 18th birthday. Don’t worry if you can’t remember whether or not you opened one of these when your child was born – you can use the Government’s handy checking tool

Saving versus investing

Your child’s trust fund might be held in cash and earning lower interest than an investment product. Past performance is by no means a guide to future performance but, historically, investing in the stock market over the long term tends to produce superior returns to cash savings. However, investing in the stock market carries risks and you may get back less than originally invested. 

At BMO, you invest in stocks and shares through our investment trusts. Each one offers different aims and strategies with the option of capital growth, income or a combination of both and with a specific regional focus or with a global remit. If you are looking to build up a pot of money for a young child, then this could be a suitable option – make your money work harder and watch your child’s future grow alongside them. 

Anybody can contribute to a Child Trust Fund; you just need to give them the account details. With the minimum investment set at just £10, these funds are a great way of enabling loved ones to contribute to your child’s future. It doesn’t matter if your child’s trust fund was set up elsewhere in a cash account – transferring to a BMO Child Trust Fund is simple. 

Harbouring financial responsibility

Although the money in a Child Trust Fund is locked away until their 18th birthday, your child can take control of their account when they turn 16. At age 18, your child gains access to their money – this can be an effective way to encourage a sense of financial maturity in them. It is up to them to decide whether to start spending, save it for longer or reinvest it for an even brighter future by transferring it into an adult account. 

The value of your investments can go down as well as up, and you may not get back what you originally invested. Tax allowances and the benefits of tax-efficient accounts are subject to change and tax treatment depends upon your individual circumstances. 


At BMO, our aim is to help our clients overcome the challenges they face and deliver the investment outcomes they seek. We've been helping clients with their financial needs for over 200 years.

A lot has happened since 1817, including the launch of the world's oldest collective investment fund vehicle - F&C Investment Trust over 150 years ago. This fund made investing more accessible to individual investors and we are proud to still manage it today.

We currently manage 10 Investment Trusts, providing a range of investment opportunities including access to equities, bonds, property and private equity. Each trust has different aims and objectives with the option of capital growth, income or a combination of the two and with a specific regional focus or with a global remit.

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