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Learn about Children’s accounts

If you want to save for a child’s future our Children’s accounts, are designed to provide that all-important head start in life.

It’s never too early to start saving

If you’re a parent, grandparent, aunt or uncle, it’s never too early to start saving for a child’s future. You can invest a lump sum with our Little Rock Fixed Rate Bond or put away a regular amount each month with our Little Rock Instant Access Account, or you could do both.

The Little Rock Instant Access Account will be automatically transferred into an appropriate adult savings account on 5th April, following the child’s 16th birthday. The Little Rock Fixed Rate Bond will become a no-notice matured access account after the fixed rate period. We will contact you prior to this date to advise that this will be happening. At the same time, we will seek to clarify whether the account should retain the trustee status, in which case the interest must be paid net, or, if the trustee status is to be removed – the child may be eligible to register a form R85 in their own right.

The money saved could give the young adult a good financial start in life and could help them to:

  • Understand value of money
  • Help with their education
  • Save for something special

Things you might like to know

Before you decide which account is right for you, here are a few things you might like to know about saving for children.

  • Most children don’t pay tax?, so the interest? they receive on any savings will be tax-free.

  • There are special rules in place with HMRC if the savings have been given by a parent. If gifts from a parent produce more than £100 gross income a year, the whole of the income from the gift is normally taxed as the parent’s income and a child cannot get back any tax on that income. Nor can interest paying accounts be registered to have interest paid without tax taken off. The £100 rule applies separately to each parent. The £100 rule applies to income arising each year and it does not matter whether the fund is comprised of part capital and part added interest. The £100 rule applies as long as income is over £100 in any one year for any one child from one parent.

    For example, if a parent gives a child £2,000, which earns £98 interest, the interest belongs to the child for tax purposes and the account can be registered for gross interest. But if the £98 is added to the account, leading to £101 interest being earned in year 2, the interest has now exceeded the £100 limit. This means it now belongs to the parent for tax purposes and the account cannot remain registered for gross interest.

  • If your estate? is worth more than £325,000, you can give financial gifts to a child up to £3,000 each year which will be exempt from inheritance tax?.
  • Interest will be paid net (after tax) or, subject to the required certification, gross (before tax) even if the beneficiary is under 16. If you wish to register for gross interest, please complete a form R85.

Interested in a Children's account?

We currently have Little Rock Instant Access Account on offer, not our Little Rock Fixed Rate Bond. If you would like to see what other accounts we have available, visit find a savings account to look at our entire range. Alternatively, if you would like to chat to us in person, please pop into your local branch or call 0845 600 4466* and we’ll be more than happy to help.