In his budget nearly two weeks ago, Gordon Brown, confirmed the launch of the new Children's Trust Fund.
The new Child Trust, which will be backdated, will mean that the Government will make cash gifts to all newborn and then periodic lump sum gifts into the savings plan over the course of them growing up. The Government are hoping that parents and grandparents will follow their lead and make further savings contributions.
Tax Issue: Caution and tax is the key though. has a view that parents particularly have to be careful to avoid these savings being taxed. The basic rules allow that if parents invest for children and receive more than £100 per year in interest, this is then taxable as parents income.
If you are a higher rate taxpayer, this could mean losing £40 of that £100!
For a free fact sheet on the taxation rules for saving for your children visit our free fact sheet download page.
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