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Have your say: Child Trust Funds

A baby drinking
Should you be saving for your child straight away?

Do you save money regularly to give to your children when they reach 18? Would you have done so without the government-backed scheme?

There is almost £2bn saved up in Child Trust Fund accounts for more than four and half million children aged under eight.

The latest figures out this week show that parents and relatives between them put an average of £289 a year into each account.

But according to the Institute for Fiscal Studies, abolishing the scheme would make a small, but not insignificant, contribution to the total £26 billion spending cut estimated to be needed by 2013-14 under the Government's spending plans.

Each year around 800,000 newborns receive an account at a cost - including the top-ups at age seven - of around £500 million to the taxpayer.

The Liberal Democrats say the scheme should be scrapped so the £500 million a year it will soon cost can be spent on reducing class sizes in schools.

The Conservatives would cut the scheme, limiting it to the one in three children who live in households with a low income of around £16,000 a year or below.

Would you have saved money for your children without the scheme?

Do you think it should be scrapped or restricted to just those from families on low incomes?

What are your experiences?

Tells us your views


David White, of Children's Mutual, when talking about child trust funds seems to assume that all 18 year olds will be university graduates with debts, and he talks of parents 'not having to remortgage', i.e. who are householders in the first place. Certainly those were the only types of people he talked about. What about the problems of giving a large sums of money to teenagers who are not responsible young adults, and whose parents may not be responsible adults either, and who do not want to spend the money on something society deems suitable?

I recently asked my daughter (a single parent) for the details of the fund for her 2-year-old so I could set up a contribution, and she said she wasn't that sure she wanted her daughter to have a lump sum at 18. It's too young. She wishes there was some way she could have a veto in case her wonderful 2-year-old turns into (say) an 18-year-old heroin addict.
Sally, Oxford

"Hello. My name's David White and I'm Chief Executive of The Children's Mutual. I just wanted to respond to a couple of the points made. As a parent of teenage children I understand the concerns about what the money will be spent on, particularly the potential for kids to squander cash! But given the rising costs of home buying, education and actually anything a youngster wants to do to advance themselves I really believe it makes sense to help prepare our children financially for their future, whatever direction they may take.

I'd also urge families not to crystallise any temporary downward turn their CTF accounts may have felt due to the last 18 months or so of recession. Most CTF accounts are designed to 'weather the storm', and are already recovering as stock markets do so.

Switching to cash now will inevitably lock in any paper loss and will also deliver lower returns in the long run.

If you do have any further questions or concerns then I'd be more than happy to discuss them. You can get in touch at"
David White, Children's Mutual

Child trust fund benefits are a waste of taxpayers money, and the lady you interviewed was right.

The Childrens Society (formerly Tunbridge Wells Equitable) has a totally vested interest to sell their product.

I was an IFA, and saved ten years for my three boys, and the £3,000 that was given to each of them after the ten year period was squandered.

Mr Brown has no worldly knowledge, and I now have a 24 year old at University borrowing via student loans - which will be the next Brown fiasco, as I understand the students loan company is to be sold - probably to some financially abusive bank.

Mr Brown failed - not capitalism.
Peter, Wokingham

We put extra money into the childrens mutual funds for 2 of our children, topping each account up to £1500 3 years ago. Each of those account now stands as of the latest statement at a bit over £1400.

We're going to transfer the money to a different investment fund, and regret ever putting money into the Childrens Mutual. Cash would have been much better. Our eldest is now 7 yrs old. I'm not going to gamble on the chutzpah of the Childrens mutual over the next 11 yrs.
Ronan, Suffolk

My youngest son (now 19 yrs) had a small inheritance at the same time as getting his first student loan. He spent 3 months having a great time, left uni and got a job. He now has no money, is in debt (aided by his bank) and realises that all that money went (literally) down the drain and one or two other places!

He would not listen to my advice and then pleading. Now he really is angry with himself. What a waste.

The child trust fund at 18 should only be accessible for uni/college/training fees and if not going to uni then not available until 25 (or earlier if studying).

Most 18's cannot control themselves where money is concerned.
Gillian, Cornwall

Child Trust funds are a waste of taxpayers' money and should be scrapped completely. Allowing access to the money when the child reaches 18 is ludicrous - the majority of youngsters at this age are more likely to spend the money on a booze filled holiday or fast car than put it to worthwhile use e.g. paying for university fees or keeping it invested for a future purpose like helping to fund the deposit for their first home.

The person from the Children's Mutual is obviously going to think CTF's are a good thing as his company has a vested interest.

When Brown came up with this scheme it was ill thought out and with the public finances in such a dire state, something we can no longer afford.
John, Dorset

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