The Treasury's Economic Secretary believes that child trust funds have been a success and will form the core of government strategy for improving financial inclusion. He has said that parents have invested 72% of the child trust fund vouchers, and 23% of these accounts have had direct debit contributions added to them, and he is certain that the scheme is to 'revolutionise' the way people save.
He believes that with additional contributions by the Government at age 7, alongside specific money lessons in schools, and the introduction of financial education into the maths curriculum from 2008, the Governments' initiative will 'transform the country's attitude to saving'.
Our view
The Child Trust Fund will not work - people just redirect existing savings into these new style plans so the direct debit headlines are misleading. Look at the reafigures, 28% of this "FREE" money has been ignored!
However, education of our younger generation will work. The impact if this will be seen in twenty years or so where more astute people start work and again the long term impact will be seen in fifty or sixty years when these same people reach retirement.
has been calling for improved education for years, these are welcome moves.