The Chancellor confirmed the introduction and indeed the backdating of a new Child Trust Fund. The Child Trust Fund proposes to make a cash sum gift to a child on birth and at vary ages by the Government. This must be invested in a special savings account and can then be added to by others to save for the child. For any child born after September 2002, the Government will invest £250 in a savings plan. Parents and Grandparents can invest up to £1000 per year on top. Poorer families children may receive an extra boost up to £500 in value. No details are available at present but this could be in the format of say an extra £50 per year from ages 11 to 16.
Our view:
This is a great start for the younger generation. Hopefully, it will encourage more people to save in general.