Martin Lewis has issued a tax warning to parents who are saving money for their children.
Speaking on This Morning on Tuesday (16 September), the Money Saving Expert founder explained that if money is given to children by their parent or step-parent and the child earns more than £100 interest a year on it, then the money is taxed at the parents’ tax rate.
He explained that a way to avoid this is by putting money into a junior ISA, which allows guardians to save or invest up to £9,000. The money is not accessible until the child turns 18, when the account becomes a standard ISA, and it is never taxable.
