BusinessCompany NewsChancellor to protect Child Trust Funds

Chancellor to protect Child Trust Funds

Chancellor Gordon Brown is to cap charges that providers may impose for operating his new £250 Child Trust Funds, announced in this year's Budget.

Link: Budget 2003: Trust funds launched for UK babies

ÿDetailed proposals issued by the Treasuryÿmake it clear they will be run on similar lines to ISAs but with less risk.

ÿAll children born after 1 September 2002 are eligible for the accounts but they will not become available until 2005 – their vouchers will include an additional sum to recognise the fact that there will be less time for the funds of older children to grow in value.ÿ

All children will receive at least £250 at birth, with up to £250 more for those born to the poorest families. A further payment will be made on the child’s 7th birthday and family and friends will be encouraged to add their contributions.ÿ

CTF accounts will be available from a wide range of providers including banks, brokers, building societies, friendly societies, investment managers and life insurers.

ÿAll types of accounts – includingÿstakeholder accounts, cash deposit accounts, bonds and equity investments -ÿwill be exempt from personal tax.

ÿThe government will set out the level of the charge cap later this year.

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