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700000 seven-year olds get Trust Fund boost

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Issued 09 September 2009

700,000 seven-year olds get Trust Fund boost

Chancellor of the Exchequer Alistair Darling and Exchequer Secretary Sarah McCarthy-Fry today welcomed a group of school children to an event at 11 Downing Street to celebrate the first ever Child Trust Fund payments for seven-year olds.

From this month onwards, children who turn seven will get a £250 birthday boost to their Child trust Fund account. The extra money will benefit 700,000 children per year, with children in lower income families also receiving a further £250.

Since they were launched in 2005, Child Trust Funds have helped over 4 million children across the UK start to save for their future. Around £2 billion is currently held in Child Trust Fund accounts.

Chancellor Alistair Darling, said:

"Child Trust Funds are a vital part of the Government’s commitment to ensure every child has the best start in life and the opportunity to reach their full potential regardless of their background.

“Child Trust Funds are fundamental to ensuring every child across Britain can learn to save for the future and look forward to their own tax-free sum when they turn 18."

Exchequer Secretary Sarah McCarthy-Fry said:

“Child Trust Funds are providing a generation of children with an understanding of the benefits of saving for the future, while reinforcing the savings habit. In addition, parents, family and friends can help children to save for the future by making extra contributions to a child’s account, up to a total of £1,200 a year.”

Child Trust Funds are designed to strengthen the savings habit of future generations, promote financial education and ensure that in future every child will have access to a financial asset at the age of 18. 

Notes

1. From September 2009, the Government is making the first Child Trust Fund payments to 7-year-olds.  Children will receive a payment of £250 straight into their Child Trust Fund account.  A further payment of £250 will also be made to the accounts of 7-year-old children in lower-income families, and children in care.

2. The Child Trust Fund is designed to:

  • Strengthen the savings habit of future generations;
  • Promote financial education; and
  • Ensure that at age 18 every child will have access to a financial asset

3. Over 700,000 children per year will benefit from the age-7 payments. Every child who turns 7 will receive £250 from the Govt into their Child Trust Fund account.  Around one-third of 7 year olds will also receive the additional Government contribution of £250 for children in lower income families (£500 in total).

4. The Government announced at Budget 2009 that it would also make additional contributions to the Child Trust Fund accounts of disabled children.  These payments will begin in 2010. 


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Article Published/Sorted/Amended on Scopulus 2009-09-09 16:27:49 in Tax Articles

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