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Thursday, November 06, 2003

Baby Bonds (officially:Child Trust Fund)

Baby Bonds have been officially launched. I'm delighted. Not least because about ten years ago I proposed the idea but it wasn't taken up at the time. Never mind all good things come to those who wait! (well sometimes!). Anyway for those who don't know any child born on or after 1st.September 2002 will get a minimum of £250 (£500 for low income families) and they will get this without claiming - it goes via the child benefit system. The money goes into a protected account and can't be drawn before the child is 18. The Government will put in another lump sum at age 7 (the amount is not yet decided) and then friends and relatives can chip in so over the years it could become a useful sum.
It encourages saving and gives real help to those on low incomes who often have little or no capital at age 18. Cynics will say that it will all be spent on booze,drugs,sex or whatever! No doubt some of it will be but I believe the majority of young people will use it well. In any event, this is a good example of a Government taking a very constructive initiative.
Further details should be available on the Treasury web site. The initiative was launched by Ruth Kelly MP,Financial secretary at the Treasury.