Happy returns of the year

Cash Mini ISA Up to £3,000 a year can be sheltered in this tax-efficient savings account, which is also available to children aged 16 and 17.

Stakeholder pension A contribution to a stakeholder pension qualifies for basic rate tax relief. You can currently take out a stakeholder pension in a child's name from birth and contribute up to £2,808 net each tax year into the plan. HM Revenue & Customs will add basic rate tax, which will bring the total invested annually up to a maximum of £3,600.

Friendly Societies Another investment choice is a Friendly Society ten-year tax-empt regular savings plan. After ten years, returns are tax efficient. The savings plans also provide life insurance cover. The maximum monthly premium for each individual is £25 or £270 per annum.

National Savings These are regarded as low-risk investments and opening an account is a simple procedure. The downside to this type investment is that, if interest rates remain low over the medium to long term, the rate of interest paid on some investments may be less than the rate of inflation.

Unit trusts A unit trust is a collective investment fund and should be considered as a medium- to long-term investment of five years and beyond. Unit trusts vary in risk profile from relatively cautious to highly speculative. Over the medium to long term, on average they have provided a better return than money held on deposit, although past performance is not necessarily a guide to the future.

Levels and bases of, and reliefs from, taxation are subject to change.