Savings to fill child benefit gap

The government is planning to dispose of child benefit payouts for higher-rate taxpayers, thus by transferring more money down to the generations, wealthy families are hoping to save on inheritance tax. Many households in the UK will soon be confronted by a savings gap as they will no longer receive a child benefit payout. Due to taxation rules, grandparents will pass on their savings to their grandchildren, which they can on up to £3,000 a year while still avoiding the probability of becoming liable to inheritance tax. Experts believe that investors will presumably set up more saving schemes which might lead to a resurgence in investment accounts for children.

Wouter Verstringe

Financial Times