Rising inflation threatens children's savings

21 Aug 2008

The Share Centre has called on the government to increase Child Trust Fund (CTF) vouchers in line with the growing rate of inflation.

When the scheme was launched in April 2005, children born after 1 September 2002 had their vouchers - worth £250 - topped up to allow for lost growth. However, since then, newborns in the UK have received £250.

According to Guy Knight from the Share Centre, babies born in the current economic climate should be getting £288 in order to give them an equal sized nest egg as babies born on 1 September 2002.

"While it is great that children are given this financial start in life, it is not fair that children born today will get £145 less after inflation than their predecessors in the course of the scheme," he said.

"If you forecast the difference over the child's 18 years, the government could be looking at a shortfall of over £97 million a year for newborn babies."

CTFs do not affect any family benefits or Tax Credits.

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