As a follow up to his announcement in Budget 2003, the Chancellor this week published detailed proposals for a Child Trust Fund for every child in the UK born after 1st September 2002.

The Chancellor is proposing to give the parents or legal guardians of each child born after that date a minimum £250 endowment to open a savings or investment account in their child’s name. An additional £250 will also be made for children in families on Child Tax Credit and whose income is below the Child Tax Credit threshold (currently £13,230).

Further payments will be made by the Government when each child is aged 7 and parents, families, friends and children themselves will be able to make contributions to the Child Trust Fund account, up to £1,200 per year between them, with all income and gains produced being exempt from personal tax (as for ISA’s).

Speaking today, Eric Joyce MP said

‘The Child Trust Fund will ensure that in future, all Falkirk children and children throughout the UK will have the backing of financial assets at the start of their adult lives.

These funds will help them make the transition to adulthood as a deposit on a home, an investment in lifelong learning or simply a safety net to fall back on in difficult times.

Coupled with better financial education, greater independence and informed financial choices, access to capital of this kind at an important stage of life will help to greatly improve the life chances and quality of life to Falkirk kids.

I firmly believe that the Child Trust Fund will extend opportunities to many of our children who have been held back in the past and I wholeheartedly welcome these proposals.’