Children’s Investment Fund: How does it work?

The Children’s Investment Fund, or to give it its complete name, the Children’s Investment Fund Foundation, and the Children’s Investment Fund Management, were both founded by Sir Chris Hohn and his wife in 2002. This Moneyfarm blog will tell you more about the foundation and other methods of investing for your child’s future.

How the Children’s Investment Fund works

The Children’s Investment Fund Foundation (CIFF) is an independent organisation that, through its philosophy, works with a network of partners to transform the lives of less fortunate and vulnerable children in developing countries.

The Children’s Investment Fund Foundation helps children and women. It focuses on child and mother health and nutrition, sexual and reproductive health rights, child welfare and education and smart ways of slowing down climatic change.

As a parent or legal guardian, you will be only too keenly aware of the cost of raising a child in the UK. The current economic climate, rising prices and high inflation don’t make it any easier. Yet, like most parents, guardians, and grandparents, you want the best for the children in your life and investing in children at the earliest opportunity will help to get their future financial well-being off to a good start.

The children’s investment fund choices for your child

The Children’s Investment Fund Foundation helps children all over the world. Still, closer to home, parents and guardians here in the UK wishing to invest in their children’s futures, or grandparents wishing to do the same for their grandchildren, have different options open to them. These options include:

• Bank or building society account
• NS&I Premium Bonds
• The Child Trust Fund operated by the UK government (no longer available for new accounts).
• Children’s Pensions
• Junior ISAs

Which are the best children’s investment funds in the UK?

Let’s start by clearing up the current situation with the UK government-operated Child Trust Fund initiative. This program was closed in 2011 and is, therefore, only relevant to children born between 2002 and 2011.

If you still have one of these funds running, it can be left until the child reaches 18 years of age, and, in the meantime, you can add up to £9,000 per annum into the account. Once the child is 18, they can access the funds or transfer them into an adult ISA or other funds if they wish.

NS&I Premium Bonds

Regarding the NS&I and their Premium Bonds for children, as with the UK government Child Trust Funds, these too are no longer available. Children who have reached the age of 16 and over have various options, including transferring their children’s bonds into Premium Bonds or Junior ISAs.

If NS&I Premium Bonds are your preferred children’s fund investment, they can be bought for children less than 16 years of age by parents, grandparents, or legal guardians. Other people can buy them by post but cannot manage them. Only parents or legal guardians are allowed to do so.

Children’s bank and building society saver accounts

We also listed the bank and building society child’s savings accounts above. These can be opened by parents, legal guardians, or anyone with the child’s permission. Unlike Premium Bonds, this type of bank or building society children’s investment fund saver account earns interest- typically between 1% and 5%.

Are Junior ISAs the best children’s investment funds?

You will have noticed earlier that we mentioned that some accounts, like the Child Trust Fund, have been discontinued for new accounts. However, you can transfer existing Child Trust Fund accounts to Junior ISAs (JISAs), which the gov.uk website recommends. Indeed, JISAs are a very popular children’s investment vehicle with many parents and guardians.

A Junior ISA children’s investment fund is available in – the Cash JISA and the Stocks and Shares or Investment JISA.

A Stocks and Shares JISA, on the other hand, carries a higher risk factor but offers a significantly better returns.

The interest applied to ISAs is compound growth, which, for many parents, makes the stock and shares JISA option the best ISAs for babies. The result of earning compound growth with each passing year and has a significant positive effect on the sum invested.

Some risk-averse parents can open cash and stocks and share JISAs for their children. However, you can only open one type of JISA in a tax year. However, only one of each type of JISA is permitted throughout the child’s life.

FAQ

What is the Children’s Investment Fund – CIF?

The Children’s Investment Fund (CIFF) is an international non-profit organization whose mission is to improve the quality of life for young children and youth through education, leadership, health care, social services, and community development programs. The organisation is also involved in climate change and works with a range of partners to help change and empower children living in developing countries and around the globe.

What is the aim of the Children’s Investment Fund?

The Children’s Investment Fund aims to improve the health and well-being of children and their mothers by decreasing malnutrition, child mortality rates, and increasing deworming efforts. The aim is to protect women’s rights at home and abroad, which includes empowering women to use contraception; providing access to safe abortion services; fighting gender discrimination and violence against women; ending child marriage and early motherhood; achieving universal primary education for every girl and ensuring equal economic opportunities for women and men globally through policies and programs to promote employment. Another objective is to eliminate climate change that might affect the future of today’s children.