Following the recent Budget, a number of Friendly Societies have called for a quicker start to the proposed Child Trust Fund, due for implementation in 2005.
The Government will make a payment of £250 upon the birth of a child. Children of low-income families will receive double the amount of £500. Families will qualify for the double amount if they qualify for the Child Tax Credit.
Up to £1,000 per year can also be added to the fund by parents, family and friends and the fund can be taken when the child reaches 18.
Full details of the Child Trust Fund will be released in the summer 2003.
Our View:
The Government is promoting the need to save in the UK. By giving money at birth and allowing others to contribute to it, hopefully people will take advantage, with the incentive of their children getting a payout at age 18. As the full details are yet to be released, we are unsure how good value for money these plans will be. However, £250 or £500 from the Government is better than we have seen before. Or, is it taking with one hand and giving back with the other?
Visit the budget special for more on child trusts.
Visit the registered users free fact sheet downloads page for a fact sheet on Savings for Children.
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