Child Trust Fund resources 'will be missed'

Wednesday, May 26th 2010

An anti-poverty charity has criticised cuts to Child Trust Fund resources.

Tom Nichols, of the Child Poverty Action Group, complained that the money should have been redirected to address people's needs more immediately.

He said the charity had always called for a redirection of the funds, but now they have been axed, adding: "The resources that were put in will be missed."

Legislation is being passed to stop Child Trust Fund payments and all contributions from birth will be axed at the beginning of next year.

In a statement, the Treasury explained that public borrowing funds the assets, meaning beneficiaries would only have to repay that same debt when they grow up.

The idea that the funds enrich young people is therefore "a deception", the government department asserted.

According to the Treasury, the cut will save £320 million in the year to 2011 and £520 million in the year after that.