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Isas and IHT here to stay
The big news this month in the child savings world came in the area of individual savings accounts (Isas), while there was also much discussion about the continuing concerns regarding inheritance tax (IHT).
Early on in the month there were calls for chancellor Gordon Brown to increase the upper limit for investment in Isas, which has stayed static at £7,000 per year since its introduction, with Nationwide recommending an increase to £9,000.
However, when Mr Brown came to making his pre-Budget report, there was no mention of such a rise, though, as expected, he did confirm that the accounts were to become a permanent part of the financial landscape, while the distinction between mini and maxi Isas was dissolved.
Additionally, the chancellor decided to allow investors to transfer funds within Isas, a move that Britannia Building Society claimed it had pre-empted earlier this month with its own capital bond mini cash Isa.
However, those calls for an increase in the upper limit weren't heeded by the chancellor, while a survey by F&C revealed that the majority of people in the UK also backed a move to increase the limit, with 21 per cent advocating a doubling of the amount.
Other news potentially affecting the money in children's savings accounts centred on IHT, as two elderly sisters lost their case pushing for a particular exemption in their own situation regarding the tax.
Earlier in the month, Halifax reiterated the call for an increase in the IHT threshold, commenting that revenues from the tax had "soared" in the last few years as house prices continued their rise.
Those worried about how IHT may reduce the amount of money they can contribute to their child's savings could take the advice of the Bank of Scotland and look into lifetime gift donations which still allow the giver access to the capital, as a means of reducing IHT liability.
Meanwhile, though younger children, perhaps predictably, favour receiving presents at Christmas in rather than additions to a savings account, a survey from Liverpool Victoria found that the numbers that preferred a savings boost increased with age.
Finally, children were being encouraged to pick up good savings habits from their parents, with Halifax urging families to make use of a child trust voucher to introduce their kids to the world of saving and take advantage of the scheme.
