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27 April 2001
NEW SAVINGS SCHEME FOR BABIES
All newborn babies will have a savings account opened for them by the government, if a new initiative that was announced on 26 April
2001 goes ahead.
The savings scheme, called The Child Trust Fund, is part of the government's bid to wipe out child poverty. Under the plan, all newborn babies will receive an account, but those born into low-income households will receive more than those with richer families. The fund will then be topped up when the child is five, 11 and 16 years of age, and parents/guardians will also have the chance to add to it.
The exact figures have yet to be finalised, but reports suggest that babies could initially receive £500, with three later top-ups of £100 each. The figures for babies from better-off families are likely to be half this. Access to the money would be allowed when the child reaches the age of 18 or 21.
Announcing the scheme, Tony Blair said "every child should have a solid stake in society" and "a sound financial platform which could help pay for lifelong learning, training, owning that first home or setting up a business".
Statistics suggest that 70 per cent of single parents have no savings. Experts say the scheme could help to emphasise the importance of saving throughout life and encourage families and children to take an active part in planning for their future.
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