TaxAdministrationHMRC forced to open 350,000 child trust accounts

HMRC forced to open 350,000 child trust accounts

Quarter of parents fail to open accounts on their own

HM Revenue & Customs has been forced to step in and open nearly 350,000
child trust fund accountants on behalf of parents, after they failed to open
them within the first year of the scheme’s operation.

Vouchers worth a total of £90m and aimed to help parents set aside money for
their children were not placed into savings accounts.

Parents of children born on or after 1 September 2002 are entitled to a £250
pound voucher to open a CTF on behalf of their offspring, while those from
lower-income families receive an additional £250.

Jason Holland, head of communications at F&C Asset Management, which
provides investment trust-based CTFs said at least £87m pounds of public money
has been languishing ‘in drawers, chucked in the bin or stuffed down the back of
a sofa’.

The government will make further payments into all CTF accounts when children
turn seven, and is currently consulting on the possibility of a third payment
when children start secondary school.

CTFs mature when children reach the age of 18.

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