Details of child trust fund released

Details of the £250 child trust fund announced by Chancellor, Gordon Brown in this year’s Budget have been released.

Every child born after 1 September 2002 will qualify for the fund, which will rise to £500 for the poorest children.

Young people will be able to access the fund when they turn 18, giving them extra security and opportunity in adulthood. It will also give them experience of savings and investment and help them to manage their finances better in later life.

Detailed plans published yesterday mean that:

• The government will make another payment when children are seven years old. The size of the payment will be confirmed at a later date;
• Family and friends will be able to contribute up to £1,200 a year between them to the fund;
• There will be no need to make a claim for the fund – access will be automatic through the child benefit system
• Providers will be able to offer a variety of accounts
• There will be no tax on income and capital growth
• Special arrangements will be made for children in care.

Financial Secretary Ruth Kelly said the fund was “a leading example of the government's commitment to an active welfare strategy based on the principles of security, opportunity and responsibility for all".

(MB)