What is Beanstalk?
Beanstalk is a mobile app designed to help families work together to save money for their children’s future.
The Beanstalk app makes it easy to build a meaningful pot of money for when your children reach 18 to give them the best possible launch into adult life.
Through the app, you can open accounts for all your children, and yourself, and then use our tools to put money aside. Grandparents and other friends / family can link using their Beanstalk app to your children so they can also help out.
How does Beanstalk help you save money?
The Beanstalk app brings together a number of tools to help you put money aside for yourself and your kids.
Through the app, you can see all of your accounts in one place, invite family and friends to link to your children, and set up one off or regular contributions. You can collect free savings on your shopping at KidStart’s 2300+ retail partners and use our round ups tool to round up purchases you make and save the balance.
Grandparents and other donors can use their own Beanstalk app to contribute in the same great ways and can send and receive messages with the gifts they make.
Where does the money get saved and invested?
Through the App you need to set up a Beanstalk Account for anyone you wish to save for (your children and/or yourself). If you have been invited to save for a child, their account will have been set up already by the parent.
The Beanstalk Account is a simple and flexible account through which any contributions are invested at your choice in the funds we offer. The Beanstalk child account is a Stocks & Shares Junior ISA and requires no minimum contribution to open. The Beanstalk adult account is a Stocks & Shares ISA which can be opened with just £10.
Does Beanstalk have any fees?
Beanstalk has a simple and inexpensive fee structure, which consists an annual fee equal to 0.5% of the value of any Beanstalk Account.
The funds we offer have annual charges deducted directly from the funds themselves of 0.12-0.15%.
More details on charging are available in the terms and conditions; for example we may charge for paper copies of statements.
The Beanstalk Account
What is a Junior ISA?
A Junior ISA is a tax-efficient way to save or invest for a child’s future as all income and capital gains within a Junior ISA are exempt from UK tax personal tax. There are two types of Junior ISAs: Cash or Stocks & Shares. A child can only subscribe to one of each type during their childhood, and children cannot share a Junior ISA: each account is personal to one child.
The Beanstalk Junior ISA is a Stocks & Shares Junior ISA.
What is an ISA?
An ISA is a tax-efficient way to save or invest as all income and capital gains within an ISA are exempt from UK personal tax. There are several types of ISAs and the Beanstalk ISA is a Stocks & Shares ISA.
The Beanstalk ISA requires a contribution of at least £10 to open. There is no requirement to set up a regular payment unless you want to.
Who is eligible for a Beanstalk child account?
The child must be a UK permanent resident aged under 16 at time of application.
To open an account for a child, you must be the parent or legal guardian of the child and aged over 18. If the child has an existing Stocks & Shares JISA or a Child Trust Fund, you must transfer it to Beanstalk as children cannot have more than one Stocks & Shares JISA. (Note: a child can have both a cash and a Stocks & Shares JISA at the same time.)
What is the Junior ISA allowance?
The JISA annual contribution limit is £9,000 for 2020/21. Any contributions over this limit may at our discretion be invested through a general investment account (GIA) designated for the child until there is room in the tax free contribution limit in a following tax year.
How do I transfer a child’s Junior ISA or Child Trust Fund?
We will handle the transfer for you, liaising with your existing provider, and will tell you anything you need to do once you have applied for the Beanstalk JISA.
What happens when the child reaches 18?
Prior to their 18th birthday, we will contact the child through you to advise that they will become the owner of the Junior ISA and can access the savings. On the child’s 18th birthday, the Junior ISA automatically converts into an adult ISA and the child will become legally entitled to manage the account. We will explain to the child how they can take over the account at that point.
Under HMRC rules, money cannot be withdrawn before the child’s 18th birthday except in the case of the child’s death or a terminal illness.
Can I withdraw money from a Beanstalk child account?
No. Once a contribution has been made into a Junior ISA, it has been given to the child and is only accessible by the child once they are 18.
Who is eligible for a Beanstalk adult account?
You must be over 18 and resident in the UK. We do not accept applications from US citizens. You cannot subscribe to more than one Stocks & Shares ISA in the current tax year; if you have done so, you will need to transfer this to Beanstalk.
The Beanstalk ISA requires a contribution of at least £10 to open. There is no requirement to set up a regular payment unless you want to.
What is the adult ISA allowance?
The annual adult ISA allowance for 2020/21 is £20,000. Any contributions over this limit may at our discretion be invested through a general investment account (GIA) until there is room in the tax free contribution limit in a following tax year.
When can I withdraw from my Beanstalk adult account?
You can ask to withdraw money from your ISA at any time. If the money you wish to withdraw is held in investments, these will be sold on the next trading day which could be 7-10 working days after your request. Payments will be made to the bank account linked to your Beanstalk account via BACS once the cash is available within your account and this could take a further 5 working days.
You can only make one withdrawal request at any time.
Please note: investments in a Stocks & Shares ISA should be regarded as longer term investments.
Investing with Beanstalk
What can the money saved using Beanstalk be invested in?
You can choose to invest in two funds offered via Beanstalk. The two funds are the Fidelity Global index fund, which aims to track the performance of global stock markets and the Legal & General Cash Trust fund, which aims to provide returns in line with money market rates.
Your contributions will be allocated to the two funds according to the split you set when you apply and you can change this allocation through the app after the account is opened.
How do allocations work?
Purchases and sales of funds through Beanstalk are made once a week. We use the allocation that is set on your account on the previous working day to determine the allocation that is applied to any new contributions received at that point.
If you change your allocation, we will automatically create trades for the next trading day to adjust your existing holdings to your new allocations as well as changing how your contributions are invested going forward. For example: if your existing holdings are 90% by value in one fund and 10% in the other, moving your allocation to 50:50 will result in selling one fund and buying the other so that you end up with 50:50.
Why don’t you allow over 80% in the L&G cash trust fund?
The L&G Cash Trust invests in lower risk, lower return investments such as short term deposits, government bonds and similar. The returns from a portfolio which is 100% invested in the L&G cash trust may be lower than putting money into a cash ISA or JISA with a bank or building society so we don’t allow this.
Will you help me decide how to invest?
No. Beanstalk is does not provide any investment or tax advice. If you have any questions about investing, then you should contact a suitably qualified financial adviser.
How are my investments and money protected?
Your money and investments are held under Financial Conduct Authority client money and asset rules by our Platform Provider, Third Platform Services, who are regulated by the FCA.
Your investments are covered up to £85,000 under the Financial Services Compensation Scheme.
Who can save for my child?
Through Beanstalk, you can invite family and friends to save for any or all of your children. This will send them an email invite which they can accept or decline through their own app. If they accept, then they can use Beanstalk to contribute to your child.
You will be able to see any contributions they make. They will be able to view the contributions they have made to your children, but will not be able to view information on total value or contributions that you have made.
What do it do if I have received an invitation to save for a child?
Congratulations! You’ve been invited by the parent to help save for a child to give them the best possible launch into adult life.
To accept the invitation, download the Beanstalk App and register or log in with the email address that the invite was sent to. Once you have logged in you will be given the opportunity to accept or decline the invitation.
How does the round up tool work?
The round up tool uses the Government-backed Open Banking initiative through which you can give your bank permission to let us securely display your bank data to you. This is read only, with no access to change any of your details or make transactions.
We have partnered with OpenWrks, an FCA Authorised Account Information Service Provider, who manage the connection to your bank. To enable round ups, you need to give consent to your bank which you do through the links in the App.
If you have given permission, the round up tool displays your recent purchases and you can decide which to round up. The total round ups are collected from your bank by direct debit on a weekly basis.
Any round ups you make will be split between all the Beanstalk accounts you are linked to. For example: if you have 2 children and an account for yourself and you round up £5, each will receive £1.66 (with 1p left over!)
How do I round up transactions?
The app shows you purchases that you have made over the last 7 days. These are updated once a day so today you will see any purchases you made yesterday along with the round up amount. To round up you swipe the purchase to the right.
When you round up a purchase, the round up amount is added to the running total of round ups you have made during the week. You can manually adjust change this running total up or down at any point through the App.
Through the app, you can enable /disable “auto round up”. Auto round up will automatically round up any purchase after 7 days.
When will the round ups be collected?
The total round ups are collected from your bank by direct debit on a weekly basis as follows.
Every Monday, the weekly round up total for the previous week is calculated and the round up total is reset. We will notify you by email of the total amount to be collected through your direct debit and when it will be collected.
The direct debit is typically submitted to your bank for collection on the following Monday (or nearest working day after) at which point it will be split and allocated between the Beanstalk accounts you are linked to.
Note: the minimum direct debit value we can collect is £5. If your round up total is less than this, then no payment will be taken and it will carry forward the following week.
What is KidStart?
KidStart is the company behind the Beanstalk app. Established in 2008, KidStart has been helping families to save millions of pounds for their children for 12 years.
Shopping at any of the 2,500 retailers listed on KidStart earns money back for your children. With well known retailers such as John Lewis, Amazon, Sky and TUI, you can turn your family spending into an investment for your children’s future.
Learn more about KidStart at www.kidstart.co.uk
Direct debit and investment timing
How do I set up a direct debit?
Through Beanstalk you can set up a direct debit(s) to enable contributions and gifts to be taken. The direct debit must come from a bank account in your name and we will carry out verification checks on this. We will use separate direct debits for each account you have set up.
We will notify you by email when the direct debit instruction has been set up. this will typically be within a couple of days but can be delayed if we require further information from you. In these cases, we will let you know by email when the instruction will be set up.
Direct debits are covered by the direct debit guarantee as outlined on the direct debit instruction and in the direct debit confirmation email that we send you.
How do I know which account the direct debit is for?
We will use a different direct debit instruction for each account that you open. Each has a separate reference which we will communicate to you.
For example, if you have two children with Beanstalk accounts, you will see two separate direct debit references and payments on your bank account.
What is the name on the direct debit?
Money collected via direct debit is put into a client money bank account operated under FCA client money and asset rules by our FCA authorised platform provider, Third Platform Services Limited. You will therefore see that the direct debit instruction is in favour of Third Platform Services Limited and the name on the payment on your bank account will be “TPS re KidStart / KidSave” (depending on how much information your bank shows you on your account.)
When are direct debits collected?
We collect one off top ups and regular monthly contributions at different times as detailed below. We will notify you by email in advance of:
i) A first regular monthly contribution or any changes to timing and amount thereafter; ii) All one-off top ups or payments.
We collect regular contributions on the 18th of each month. If the 18th falls on a weekend or clashes with a public holiday then the collection date will be the first working day after the 18th.
We send payment instructions to the bank 5 working days in advance of the 18th. This means that if you set up or request a change to the regular instruction within 5 working days of the 18th, the change will be made the following month.
We will notify you by email 5 working days in advance of a new regular contribution or any change to the timing and amount thereafter.
One off top ups
We typically collect one off top ups weekly on Mondays. If the Monday clashes with a public holiday, then the collection date will be the first working day after.
We send payment instructions to the bank 5 working days in advance. This means that if you request a top up, we will collect it on Monday week after you requested the top up.
We will confirm your top up to you by email 5 working days in advance of collection so you know the exact day it is going.
We will notify you by email for every top up 5 working days in advance of collection.
When does money get invested?
Buying and selling of funds happens once a week, normally on a Tuesday.
We use the allocation that is set on your account on the previous working day to determine the allocation that is applied to any new contributions received at that point.
Only contributions that are cleared at that point are included in the calculation. Direct debit payments can be occasionally clawed back through the banking system once they have been received, so we therefore wait a couple of days before clearing these payments for investment.
If you change your allocation, we will automatically create trades for the next trading day to adjust your existing holdings to your new allocations as well as changing how your contributions are invested going forward.
For example: if your existing holdings are 90% by value in one fund and 10% in the other, moving your allocation to 50:50 will result in selling one fund and buying the other so that you end up with 50:50.
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