Celebrating the Child Trust Fund


Maybe I wasn’t listening – and, hey, given the quality of most of the speeches I’m not apologising – but among the achievements being lauded at Labour Party Conference I didn’t hear much mention of the Child Trust Fund. The CTF gives all new-borns a savings account with a small nest egg, which is bigger and topped up for the least well-off. The lack of celebration is a pity for several reasons:

• It is a genuinely innovative policy and one that has impressed many progressives in other parts of the world

• Unlike so many other social policies it is inherently long term (and therefore likely to be more realistic in its aims), seeking over a generation to make a profound difference to lower income attitudes to saving

• It does seem to be working (see below)

• It is good mixture of ideas associated with the left of centre (redistribution, role of the state in increasing life chances) and the right (importance of saving, foundations for thrift and responsibility).

• It may be vulnerable after the election given that the LibDems oppose it and the Conservatives are looking for cuts, cuts and more cuts.

• I was involved in making it happen (as I implied yesterday, I increasingly find myself raking through the ashes of my past to find a scorched cardboard buttress temporarily to prop up my collapsing self esteem).

I am grateful to David White from The Children’s Mutual for this list of CTF successes:

• All children born since September 2002 will have a much needed financial head start at age 18

• More than 4.5 million children already have open, active accounts, approx. 70,000 are opened each month

• An estimated 11m adults are involved and research confirms the popularity with them of the CTF

• Savings rates have trebled, 2 million parents are saving for their children each month

• Monthly amounts being saved for children up from £15 to £24, a 60% increase

• Families from all walks of life are embracing the CTF by engaging and saving, including low income families, 30% of whom add monthly to their child’s CTF

• More than £2bn invested in children’s futures

• CTF has acted as a catalyst for new financial education initiatives in schools

• 97% of the CTF Government investment goes to families with household income below £50,000

• More than 100 British companies are involved in supporting parents by giving access to CTF’s

If we stick with the CTF, we will create an expectation in every family that saving is part of preparing children for adulthood and we will provide every young adult with a nest egg which will not only encourage them to save more but could provide the spring board for opportunities they would not otherwise have had. Like the Open University or the Channel Tunnel, we should see the CTF not as something for one party to be proud of, but for us all to celebrate.

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