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Media centre /
Press releaseNS&I INCREASE CHILDREN'S BONUS BOND LIMIT RAISED TO £3,000 28 October 2004From 1 November 2004, parents, grandparents and family friends will be able to invest three times as much tax-free for the children in their lives, following the decision by National Savings and Investments (NS&I) to increase the amount that can be invested in Children’s Bonus Bonds from £1,000 to £3,000 per Issue. Children’s Bonus Bonds were introduced in 1991 with an investment limit of £1,000. Perfect to help towards a child’s first car, deposit on a starter home or as a gift, Children’s Bonus Bonds are a tax-free investment held in the name of the child under the control of the parent or guardian*. While it will now be possible to invest £3,000 per Issue, Children’s Bonus Bonds remain accessible for those who want to invest as little as £25 per Issue. Key features
A new Issue becomes available whenever NS&I changes the interest rate on Children’s Bonus Bonds – roughly four times a year – and they are available to buy all year round, making them suitable to give as gifts for any occasion. Customers can continue investing in them until the child turns 16 and each Bond earns a fixed rate of interest for five years and, on the fifth anniversary, a bonus is added. The bonus is fixed when customers apply for the Bond, so, when they invest, they know exactly what the Bond will be worth at the end of the five year term. For example, if a customer invested £3,000 in Children’s Bonus Bond Issue 16, for the first five years the investment would earn compound interest of 3% per annum (£477.81). On the fifth anniversary the investment earns an 8.44% bonus of the original investment value (£253.20). After five years, the initial £3,000 investment would be worth £3,731.01 At the end of each term, customers can leave the Bond to earn a new tax-free rate of interest for a further five years, or until the child is 21, when a final bonus is added. And if the child starts work and becomes a taxpayer before cashing in their Bond the interest and bonuses remain tax-free. Gill Cattanach, marketing director at National Savings and Investments, said, “For parents, grandparents and family friends looking for a straightforward and secure way to save for a child’s future, Children’s Bonus Bonds represent an ideal opportunity to build serious and long term tax-free investments for children. How to invest Children’s Bonus Bonds
For further information on Children’s Bonus Bonds customers should log on to the National Savings and Investments website at www.nsandi.com or call 0845 964 5000. Ends Notes to Editors * Until the child turns 16, when the Bond comes under the child’s own control For further information, digital images or case studies contact the NS&I Media Team. NS&I Media Team
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
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