Monday, 24 May 2010

Bye bye, Child Trust Funds....

One element of Osborne's cuts stood out to me - the discontinuance of Child Trust Funds.

These always annoyed me, for purely selfish reasons. You see, Gordon (remember him?) not only introduced them just after both my children arrived, he also introduced them just before his arrived. That hurt. That felt (quite irrationally) personal.

They're also indiscriminate, pointless, and directive, but they're not the reasons why I'm glad to see the back of them. Good riddance.


  1. Hey, if all the left-wingers whining about this are so concerned about children 'losing out on the opportunity of having a trust fund' why don't they put their hands in their own pockets for a change?

  2. Quite.

    And if they really want to continue the precedent they have set, they can encourage saving by youngsters by simply borrowing the money for them to save. Then dropping the debt on them the moment they hit 18....

  3. The even more stupid thing is letting a child have a sum of money at eighteen when he/she officially becomes an adult. I know if I'd been given money at that age, I'd have simply gone and bought a sports car!
    As grandparents, we would like to put some money in trust for our grandson's university education; to prevent him having it as cash at eighteen and doing what his grandfather would have done if he'd had the chance, we need to have a special trust deed drawn up so that it may only be released at the discretion of the trustees until he is somewhat older. This is apparently going to cost between £500 and £1000 through our solicitor.

  4. Mrs Q came up and said good.
    She's been on about them for ages as a complete waste. Both our children would have got them but they are just such nonsense.
    Gordon, borrowing money today to give out tomorrow when inflation will have rendered it mostly useless. Probably barely a terms uni tuition.

  5. I'm not completely sure that they are pointless. According to the Guardian, some chap called David White says "Indeed, if you were to look at it not as part of education, nor as part of the child poverty promises, nor as a drive towards social levelling, but as a way to get people saving, you get a clearer sense of why economists are so in love with it. . . . In terms of changing people's behaviour, this is the most successful product there's ever been."

    I am completely in agreement that they are a good riddance. My basic objection is that state handouts are deeply corrupting in that they encourage people to believe that the world owes them a living. My blood pressure was raised the other day when I was in the waiting room at the local doctor's surgery, and saw a poster telling me about the Health in Pregnancy Grant. A handout of £190 just for making it to the 25th week of pregnancy? Good grief.

  6. A fad and a phaf. The State was not only trying to be a nanny, but a grandparent too. My children didn't get them and I was going to throw all the toys out of my pram until I realised it was flawed.

    It is all good and well giving children the start of nest egg, but the money won't be appreciated as it has not been earned. In addition, the sum will not appreciate significantly as its size, management fees and low interest rates all conspire to keep it down. The scheme was ludicrous, even if the aims were well intentioned but inefficient, like many socialist policies I hasten to add. Education is far more important, or even seeking to encourage the banks and building societies to launch junior accounts with real perks. They seemed far more child-friendly and grand when I was a youngster. My kids have ended up with a plain vanilla Nationwide accounts, the setting up of which was accompanied by ridiculous amounts of paperwork and no feeling of autonomy as I had to be present and answer questions.

    Back to the trust funds, it is worth contrasting these to child benefit and the pregnancy grant (sorry YMB; I don't not deny it could better structured). These do work because:

    1. They are for immediate use.

    2. They are delivered as close to the point of need as is possible.

    3. They make a marked difference to welfare of the vulnerable.

    Some benefits are good, usually where adults are unable meet their responsibilities. Really, the State needs to reinstate stigma to receiving benefits, but not when it concerns children.

    Shame you can't get pregnant YMB. Think how rich you could be but here's a tip; it ain't worth it for the money. ;-)

  7. Do you know that the Post Office does not operate a child's savings account.

    Alliance and leicester who bought Girobank scrapped them all in about 1990.

    They are supposed to be bringing them back this year. All of BQ Amalgamated Inc.s suggestions about approaching supermarket for savings vouchers, a bar chart in the book that is coloured in with reward milestones, a savings points book, that works the same as a loyalty card, but with kids and teens types products.. All have been rejected stuff 'em.

  8. Unbelievable, Bill. I had a PO account with a blue plastic cover. Given how services get us adults by offering Nectar points, offers, rewards or trials, you would think they would offer children something. Community responsibility should accompany corporate responsibility - that may make Patently wince!

    The banks now being encouraged, nay, leant upon, to keep up non profitable 'poverty' accounts with no credit facilities, so offering a service to the over 10s is not a huge leap forward. LDTs just become interested when they can lend the student loans. You know what, it goes to show the FSA really are too concerned with ratios and multipliers, without ever seeing the bigger picture. I hate being rude but head, stuck and arse comes to mind.