what next with my childs savings ?

julie_r_4

We have saved about £6200 in a childrens account for my 7 yr old daughter by saving £50 per month over the years (this includes interest payments over those years). The account is with the Coventry building society we have been told we can't put any more into this account where is the best place to invest this money and continue to pay in £50 per month but take advantage of the tax saving - Any Ideas would be very much appreciated

PS this is the first time I have used this forum so hopefully I have done it right


Many Thanks

grumbler

julie_r wrote:

...take advantage of the tax saving ...

Best Child Savings (and use your child for a sneaky tax free allowance) - Martins article:

‘Using your children tax efficiently’, sounds slightly callous, but if you are better off, so are your kids. Saving money in a child’s name means it’s tax free and often at a higher rate of interest. It’s perfectly possible to have one account for your child to put their pocket money in, and another for any larger amounts.

Children can earn £100 interest per year before you’re taxed on it

However, don’t assume you can dunk fortunes in your kid’s name. If a child generates more than £100 interest in the course of the year from money specifically given by each parent, this income is taxed at that parents’ tax rate.

£6200*5%=£310:think:

For one year consider 10% Halifax’s Children’s Regular Saver that is mentioned in the above article ...

windym_2

"Children can earn £100 interest per year before you’re taxed on it.....However, don’t assume you can dunk fortunes in your kid’s name. If a child generates more than £100 interest in the course of the year from money specifically given by each parent, this income is taxed at that parents’ tax rate."


Actually they can have their own FULL tax-free income allowance, but if more than £100 is generated by a parent then this can be taxed at the parents tax rate as it says above. Just to clarify.