Improve CTF/ISA tax breaks

Nationwide Building Society has written to the Chancellor asking him to go further with reform of individual savings accounts and to improve the attractions of saving for children. Nationwide wants

• the ISA system to be further amended to allow equity ISA holders the option to switch all or part of their investment to cash at any point during the life of the ISA;
• cash and equity ISA subscription limits to be equalised;
• ISA subscription limits to be regularly reviewed and linked to inflation to ensure their true value is maintained;
• tax breaks on parental savings interest for children to be increased as Nationwide estimates that £60 million is paid in tax by parents when saving for their children;
• a further Government contribution of £250 when a Child Trust Fund CTF child reaches the age of 11.

• The building society is not alone - its suggestions are mirrored by a Pre Budget Report submission from the Tax Incentivised Savings Association which calls for

  • confirmation of an additional contribution for CTF at secondary school age;
  • a clear transparent and systematic formula for up-rating yearly subscription limits for ISAs CTFs and other tax-incentivised savings schemes;
  • change the rules to allow the maintenance of tax-advantaged status when moving funds between or from one scheme or product to another.

  • 05 October 2007 Moneyextra.com

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