The rules for the new Child Trust Fund (CTF), the savings initiative from the Government for all new born babies after 1 September 2002, are wider than expected.
The CTF is made up of a Government gift to each new born child of at least £250 with up to £500 for lower income families. With families then able to add up to £1,200 pa to the child's savings plan.
Quite simply, the Government have widened who is able to offer the new CTF as well as allowing children who are below the age of 18 access to their money if they need it.
An example of a "needy" case would be a child who receives the disability living allowance.
Our view
The CTF is welcome but we do not believe it will change the face of or encourage more saving by the younger generation.
Your child will be awarded their cash award by means of a voucher which you can then credit to the CTF account normally via a Bank, Building Society or Investment Company.