£242 million in Child Trust Fund tax breaks will go to waste in 2008
Figures out today from Unbiased, the website promoting the benefits of independent financial advice, show that parents will be wasting £242 million in tax breaks by not making full use of their children's Child Trust Fund allowance this year. This figure is almost twice the amount that parents were wasting in 2007 (£125 million) by not using up this tax free saving option.
The research estimates that three quarters (75%) of eligible children have had a Child Trust Fund account opened for them. However, only a quarter (24%) of the Child Trust Fund accounts opened since 2005 have recorded additional deposits, if however half of the remaining accounts received their maximum funding the amount of additional tax saving would equate to an overall tax waste saving of £242 million.
David Elms, Chief Executive of Unbiased comments:
"The government introduced Child Trust Funds as a way of helping parents plan for their children's futures. However, our research has shown that parents are not making the most of this opportunity. Parents don't have to pay tax on the interest earned on a Child Trust Fund account and by not using their full funding allowance each year they may potentially be gifting the taxman more money than necessary."
Child Trust Fund vouchers can be claimed within the first twelve months of a child's life and can be invested in cash or equities with a range of different risk profiles. An IFA can help you decide which product is right for you. Find one at the unbiased.co.uk website.
Find the best savings rates for your child - Compare savings accountsRead our Changes to Child Trust Funds GuideDownload FREE Child Savings Plan brochures
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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