Barnaby's Budgeting Tips: Day 13

The Momentum UK Team 13 February 2014

If you have kids, you've probably thought about opening a savings account for them - it can be a great way to introduce children to the concept of saving and banking generally. Today's tip is to make sure your little one keeps all the interest they earn.

Barnaby says:

"It's a common myth that children don't pay tax on their savings - in fact they are not automatically exempt. Your child can earn up to £100 a year on their savings without paying tax, but HMRC automatically taxes all savings interest at 20%, whether or not any tax is due. You will need to fill in a form called an R85 to make sure your child gets the full advertised interest rate."

Have your children's savings been taxed by mistake? How do you encourage your kids to get into the saving habit? Share your experiences and tips in the comments below!

Don't forget to enter today's #GreatBritishBudget photo challenge: Valentine's Day can be lovely, but it can also be way for companies to make us part with our cash for overpriced gifts! Today we want to see a pic of the most pointless Valentine's merchandise you've seen - you could win a £50 shopping voucher! (terms apply.)

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