What do you think about the end of the Child Trust Fund?

Submitted by on 24 May 2010 – 13:1416 Comments

Well we knew it was coming, and now it's been confirmed. The £250 Child Trust Fund voucher given to new parents is being phased out, and will be gone completely by next January.

It's a shame because I think what the CTF did for many families is to encourage them to save for their children, and at least encourage them to think about the future. Existing Child Trust Funds will continue to run.

But more worrying perhaps is the future of Child Tax Credits. According to the recent KidStart survey 44% of you believe families earning over 50k a year should continue to receive them. At the moment nothing has been said about what may happen to Child Tax Credits - but I think many of us will be watching nervously over the coming months.

*Don't forget you can deposit your KidStart savings into any UK bank or building society account.

written by Liz Jarvis

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  • Crystal Jigsaw

    Nervously definitely. I, or Amy, never benefitted from the Child Trust Fund and don’t really know much about it but Child Tax Credits is something I have come to rely on due to being paid very little as a farmer. I’m definitely hoping they don’t decide to scrap them too because there will be a lot of poorer families in this country, than the ones in Cameron/Clegg’s boat. CJ xx

  • New Mummy

    Though it will be a shame to see the trust funds go as you say it encourages parents to save, I do believe the money could be spent elsewhere for the ‘now’ rather than later. Its what will happen with the tax credits that I’m interested in.

  • Caroline – Frog in the Field

    I think it was a bit of a waste of time anyway. Many, many children would not need it at all. It’s a good place to start belt tightening becasue you won’t miss what you don’t have and parents and children managed for decades without it

  • Deer Baby

    Yes we knew it was coming but it is still a shock. I’m furious. For many people it really was a nest egg that will develop into something. It is something that parents can’t touch, that is solely for the child. You hear some dreadful stories (in The Mail admittedly) about parents squandering child benefit on fags and holidays. I know that’s scaremongering by The Mail and the majority of people don’t, but at least The Trust Fund was for the child’s future. My son was born before they were introduced but my parents set up a savings fund for him which no one can touch until he’s 21. They pay into it every month. It’s amazing how it’s growing and will help him with college, a deposit, whatever. My daughter got the £250 and it has been safely put in trust for her.

  • Caroline – Frog in the Field

    I just told my husband…he said Good, never heard anything so stupid in my life. Young people should learn money has to be earnt not handed out… (he’s now ranting)

  • Elizabeth Burton

    I can see both sides of the argument here. It wasn’t necessary for everyone as the well off could already afford to save for their kids future (and to them £250 is nothing anyway). For others I expect it was a godsend and the poorest families certainly couldn’t afford £250 to put into savings when their child is born, with all the added expense that comes at that time anyway. We got it for our daughter, and although we could have managed without it, it certainly gave us an incentive to open a trust fund and top it up with regular contributions. Not sure it would have been top of my priorities otherwise! However, savings have to be made, and I think this is probably a sensible one.

  • Liz

    I’m not that worried, it was always bit of an oddity. I don’t know many people who have added substantially to them other than the odd bit of birthday or Christmas money and you can do that with a regular ISA. I’d rather the money that went to make Sure Start and Education are protected instead.

  • Emma

    Oh No , I thought it was a good idea. It did encourage me to set up the fund for Oli when that £250 came through and then I’ve been adding to it every since. Now I’m confused to where this money will go , I’m guessing I’ll get it back and the account will be shut down and I’ll have to put it in another. Going to go and find out more now.

  • Caroline

    Although I think it was a strange unfair idea in the first place as my 2 eldest have no savings (can’t afford it) my youngest 2 do (which we add £5 a month too in lieu of pocket money) its a shame its coming to an end. Especially as my little girl turns 7 in September. Oh well never mind, they’ve lost loads of interest in the recession anyway with share prices going down, and it was money for nothing anyway. At least they’ll have something put by and we’ll continue putting money in for them.

  • The Real Mamma Diaries

    I think it’s terrible – there’s a whole class of children whose parents would never think to save for their children and this has been a wonderful incentive. I was lucky enough to receive the £250 for both my children and carried on saving every month to build up their nest egg. I also told other relatives about it and they all contributed to their savings. Without this initial pay out, a lot of families with new born babies will always put off saving – like dieting – until ‘next week.’ We always invest in the older generation but it was a refreshing change to see the government put the future generation first for a change. It’s a shame and a lot of children who most need it will not have any help to buy a car, or pay to go to college when they’re 18.

  • Karen Jones

    I think people are getting a bit confused . They are not taking away existing trust funds only new ones from the 1st August and the top up payment when a child reaches 7. If you currently have one for your child that will remain in place. I think they were a great idea when introduced although recall being amazed at the handout ! I had them for the twins but not for my eldest child. It has certainly encouraged us to save for the twins. Not a huge amount but a regular little amount which cannot be touched by parents. I think that the kind of parents that took them out are the responsible ones who want something for their children. The kind of people who squander benefits on themselves, would, I think, probably not have bothered to set it up in the first place.

  • nappyvalleygirl

    I think it’s a shame; it encouraged people to save and would have been a nice fall back for parents who are pushed to pay for University. I know they have to make cuts but I’d rather they were taxing bankers’ bonuses than taking money away from families.

  • scribblingmum

    Was it a significant amount of money? No. Did it encourage us to save more? Yes. I think it’s a shame but the country’s in a unique position at the moment and cuts have to be found from somewhere and, on the surface, this seems sensible to my simple mind. Tax credit I see differently, people rely on this to be able to survive and in lots of cases it allows parents to stay at home to look after children. This worries me way more.

  • Hayley

    If I’m honest, chances are I wouldnt have got around to putting J any money aside for years, even if I had the best intentions to do so, as a single parent pretty much for the word go its rare I have a penny to spare for new clothes and shoes let alone to put away in savings. The child trust fund has meant that although J doesnt have a dad around Mummy has been able to save a bit even if its not a great deal! I’ll be sad to see it go.

  • sharon

    I heard several interviews this week on the subject and found some of the comments strange in the least. Why would the CTF make you save? The £250 is a good start but all major banks allow children to have accounts started with £1 and a minimum payment in of £1, so why will people no longer be able to save without the CTF? We complain about the nanny state – but expect the goverment to save for us? Even if it’s just pennys in a jar till you have 100 then pay them into an account, it gives children the right idea about saving. You don’t need the goverment for that.

  • Baby Genie

    I think it’s a shame but would rather lose something I don’t already have, than suffer through higher taxes etc. That’s it, that’s my opinion!