Child Trust Funds failing poor children Tories claim

Wednesday, 06 January 2010 12:18

By myfinances.co.uk staff

The government's Child Trust Funds, savings accounts designed to give children a better start in life, are failing to help children from poorer families, the Conservatives have claimed.

While more than four fifths of parents claim Child Trust Funds in some of the wealthiest areas of the country, in the very poorest areas fewer than two thirds of parents claim the funds.

The Conservatives say research they have carried out has revealed that in wealthier areas such as Henley and mid-Sussex, where fewer than one in twenty children live in deprived households, around 85% of parents claim Child Trust Funds on behalf of their children.

But in poorer areas such as Bradford West, where a quarter of children live in deprived households, only 57% of parents claim Child Trust Funds.

Because uptake of the funds is lower in poorer areas, children living there are not enjoying the same level of savings as children in richer areas. In London and the south east, the average Child Trust Fund is worth almost 25% more than in less wealthy regions.

Shadow Families spokesman, David Willetts said: "The aim of encouraging parents to save for their children's future is a laudable one. But it is deeply worrying to learn that those who could benefit most from Child Trust Funds are among the least likely to use them.

"In their current form, Child Trust Funds simply are not reaching the children who need them most. Our proposals to concentrate government contributions on the poorest third of families, while maintaining a universal savings product for all families, will ensure that money reaches the children who really need it."

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