Bounty

Newborn children should not lose out on savings just because the Government is trying to save money by cutting child trust funds, campaigners have said.

Instead the scheme's structure should be left in place to allow parents to pay money into a designated savings scheme, even if national contributions stop, said the Save Child Savings Alliance.

Academics, charities, thinktanks and members of the financial industry formed the group and called on ministers to rethink their plans to completely phase out child trust funds in 2011, and claimed leaving the basics in place would allow the scheme to resume once the UK's finances are healthier.

Spokesman Julian Le Grand, professor of social policy at the London School of Economics, said: "We are calling for the coalition Government to retain the core framework of the child trust fund so that parents can still set up simple and dedicated savings accounts for their newborn children after Government contributions cease in 2011."

The Government announced in May that it would scale back child trust funds from August 2010, and regulations to cut payments from £250 to £50, or to £100 in the case of children from lower income households, have been laid before Parliament.

Copyright Press Association 2010