Parents not cashing in on government scheme

Date published: 26/07/2007

Child Trust Fund statistics released by HM Revenue amp; Customs show that more than one in three parents in Rochdale are failing to claim a government gift of up to £500 for their children.
 
Take-up rates for the child trust funds, Gordon Brown’s flagship measure to give every youngster a financial kick-start but in Rochdale only 63.2% of vouchers of a total of 6,145 were invested by the end of last year.

Liberal Democrat deputy treasury spokeswoman Julia Goldsworthy said the figures proved the scheme was "wasteful" — with the poorest the least likely to benefit.

The government insist that such claims are nonsense, because funds are opened automatically, after 12 months, for every youngster whose parents fail to act.

Child trust funds, or baby bonds as they are commonly known, were launched in January 2005, to ensure everybody reaching the age of 18 enjoyed a financial asset.

Each child’s account, which comes in the form of either a cash-based savings account or a stockmarket-linked product, is started with a £250 voucher from the government. Further £250 deposits are paid in at the age of seven and during secondary school.

Children from lower-income households receive £500 at birth and when they reach seven. The money cannot be touched until the child reaches 18.