The Child Trust Fund (CTF) saw the Government open an account and donate an initial £250 for every single newborn in the country. The system allowed family members to add to this, over the years, so that a child had a vital savings nest waiting for them.
At a time when the average burden of debt for an 18-year-old is £5,100, rising to £8,000 for 25-year-olds, the CTF was a way of building a more secure entry to adulthood. It was immensely popular with families. In one of the busiest and most stressful years of their life, 85 per cent of parents actively used the CTF. This compares to just 40 per cent of the adult population who have a private pension. But the CTF is now on the scrapheap.
It worked best for those who needed it most. The evidence showed that contrary to what one might think, it was families in the lowest income bracket who saved a higher proportion of their household income in their CTFs than more affluent groups.
The Family and Parenting Institute is part of the Save Child Savings Alliance, which is working to persuade the Coalition to change its mind. We accept that the Coalition is ruling in tough times, and that the state payment into the CTF is currently a stretch to the public purse. But we believe the Government should maintain the framework of the CTF, at a tiny cost, to allow families themselves to continue paying into this scheme for their children.
The Coalition has declared that it wants to promote a savings culture, and it knows the necessity of assets for social mobility. The Child Trust Fund was a proven system, tapping into families' own desires to protect their futures - a truly family-friendly economic measure. With luck, the Coalition can be convinced that even if state payments cannot be preserved, the CTF architecture can remain in place. If so, the future will be a little less uncertain for today's infants sitting on nursery carpets across the country.