Have your say on childrens' tax free savings

Former_MSE_Wendy

[title=http://images2.moneysavingexpert.com/images/dp/wtd_underline.gif] What's this all about?[/title]
The government is due to stop paying new parents the Child Trust Fund at the end of the year but it's looking at other ideas to help parents save for their children.

One idea is a tax free children’s savings account, and it wants to hear consumers' views on whether the account will be useful.

[title=http://images2.moneysavingexpert.com/images/dp/wtd_underline.gif] How to have your say[/title]
If you do think it's a good idea let us know what you think about these, or any other issues:

• What featuers would you like the account to have?
• Should it work in the same way as an adult ISA?
• What should the limitations be, if any?
• Should there be an annual min and max allowed in the account, and if so, how much?
• Should all children be eligible or just those born from 2011 onwards?

Click reply to let us know what you think about a Childs' ISA and we'll pass on some of your views to the Treasury.

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bzd

Children's savings accounts are already tax-free (well, up to their personal allowance), so what's the difference with a Children's ISA?

Fallen.Angel_3

I think it would be a good idea to have a savings account with no limits on deposits. That way more people would be able to add to their childrens savings as and when they could afford, where as now many can't afford a set amount each month and so can't add to it.
I also think that something should be made available to older children as 1 of my 3 children is too old for the trust fund but I can't afford to match what my other 2 children will receive in savings

MoneySavingMummy81

I think the premise of the trust fund is brilliant. Even if the government doesn't contribute, I think parents should have the option to open these types of accounts still. Especially the savings trust fund, the limit should be removed and the account should remain as only accessible to the child themselves upon reaching 18 years old.

If parents want to save for their children, they will as and when they can afford to.

susan47

Children have always had better accounts than adults, so why shouldn't they have higher limits on an ISA? Bear in mind the escalating costs of higher education, and they could use it towards that. Of course, it should be available to all children and not just those born after 2011, otherwise it would create unfairness within families and children born in the past year or two (or next year) will also encounter financial problems in the future the way things are going.

emeraldbugle

Great idea to have a child's ISA, maybe an allowance similar to ours. They should be able to keep all of their interest. (We shouldn't be taxed over £100 of interest).

It should be under the control of the parents. This was a problem with the Child Trust Fund, my children are 6, I have no idea what they will be like at 18 (but of course they will be perfect ). I do not want them being given all the money at 18 without our consent.

Children's easy access savings accounts are rubbish at the moment. There isn't much for them, apart from Halifax's regular saver, but that is only for a year, then it gets moved to an account paying 1.05% ! I've just taken out adult bonds with The Cheshire at the with me as a trustee.

redgirl75

Silly question, but are we now allowed to withdraw from the current child trust fund accounts and pay into a normal children's savings account? If no, when will be allowed to do this? Thanks.

rajdamu

Why not introduce something similar to a StakeHolders Pension scheme (like the adults one).
Allowing withdrawal (tax free) when the child attains 18 yrs or continue investment, this way the Child can continue to manage the account after the age of 18 and there by helps them to keep control of the finances.

There should not be an upper limit

With regards to existing CTF customers all should be allowed to transfer the existing CTF accounts to the new account.

roosterpotatoes

redgirl75 wrote: »

Silly question, but are we now allowed to withdraw from the current child trust fund accounts and pay into a normal children's savings account? If no, when will be allowed to do this? Thanks.

There will probably be a clause in the T&C stating we can't withdraw but they can have the money when they are 18, which for me isn't a problem because I would of saved for them anyway.

I would like the CTF to change into a type of ISA, definitely tax free.

I am very worried because i'm not sure anything will happen and all of the accounts will just be at 0% interest for the term, i think they should unlock the CTF status and we should be able to put them into any child savings account.:D

cliveoram

I know we are dealing with people who like complicated things but this really needs to be kept simple. The ISA needs to be "locked" so that withdrawals cannot be made before reaching 18 and then only to fund further education/approved training schemes. A one off enhancement made of 1% tax free as the incentive to get as much saved by 18th birthday. A plus point for those who don't wish to use it to fund education would be a "free" transfer into a pension fund.
Martin is pushing for financial education - this would be the perfect partner.

Reaper

There is currently a crazy £100 threshold on interest earned from money given by parents to children. It seems completely impractical as HMRC have no tools to identify whether the money came from parents or somebody else without a huge investigation so on the whole they don't seem to bother.

How about:
1) Prevent mixed money accounts. i.e. savings accounts set up by grandparents can only have money aded to them by grandparents, not parents. That keeps it simple.
2) For parents use children should have ISAs which they can put money into.
3) If parents want to set up additional savings accounts all the interest will count as theirs (i.e. get rid of the confusing £100 limit)