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Baby Love – Child Trust Funds

Updated on August 4, 2010
"Pretty in Pink"
"Pretty in Pink"

                     ✰♡*•            ✰♡*•

Kids grow up so fast. Now is the time to start saving for them so by the time they are 18, you don’t have to stress about funding their education, homes etc.

The Government in UK give money (a voucher) to every baby born, which has to be deposited into a Child Trust Fund but it has now taken a twist.

I have to admit The Government in Britain are a bit generous. I write “a bit” because the Tax we pay on earnings is not low. Benefits include:

  • Job Seekers Allowance / Income support – for those not working.
  • Family Tax Credit – for those on low income.
  • SMI Support Mortgage Interest – for those who can’t pay their Mortgage and are not working.
  • Housing Benefit – same as above but do not own their homes.
  • Child Benefit – Weekly benefit paid to every kid irrespective
  • Disability Allowance.
  • (CTFs) £250 for every baby born to put in a Child Trust Fund.

Since April 1995, the government in the UK gave £250 to every child born. £500 for low income families. They were issued as FREE Cash vouchers and parents were to choose a Bank Account for it to be deposited. Parents can add to the money if they want. The money is locked away until the child’s 18th Birthday and then they will get a lump sum.

Well, “thanks” to the Coalition government from 1 August 2010 this £250 payment will now be reduced to £50 or £100 to low income families and from Jan 2011 - it will stop altogether.

There are 2 types of CTF’s

Savings Type – this is similar to a saving account with a guarantee of getting all the money deposited plus interest.

Investment Type – On this, there is no guarantee you will get all your money back as you are risking money on the stock market.

** The exceptions to withdrawals are: sadly, if the child dies or is terminally ill. Otherwise, it has to stay in the bank till the child is 18.


Useful info

If your voucher is not used within a year, the government will choose an account which might have very little interest. So, use the Voucher Now. Also, if your child is not eligible, it would still be a good idea to start saving for him/her now.

As stated above – the Government have been generous but this news will sure come as disappointment to many.

For Readers outside the UK – Do you have something similar in your country whereby the government supports your kids?

Thanks for reading.



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    • Lady_E profile image

      Elena 7 years ago from London, UK

      Thanks for sharing Katie, Its nice to have an insight into the American Education system. :)

    • katiem2 profile image

      katiem2 7 years ago from I'm outta here

      Baby Love – Child Trust Funds makes a valid case for consideration as to what needs to be given more careful thought and consideration. The cost of college in the states is high and yet the most important concern is the lack of regard we have for the best and the brightest. Much attention and money is spent on special needs all well and good but the gifted children are just as special needs and it would be a wise investment to help them get a good education and one they most often can't afford. I like Japans education system. But here I go off in left field. Great topic!

    • Lady_E profile image

      Elena 7 years ago from London, UK

      Hi Zaheer - I understand your point but I wish they wouldn't eradicate it. I'm so glad you have got the cheques for your Twins, just in time. Nice one.

      Thanks for stopping.

    • nettech profile image

      nettech 7 years ago from London (UK)

      Its disgraceful that the Tories and Lib Dems decided to do this. However, although I'm not a fan of either party, I can see where they're coming from. With such a huge budget deficit, its no wonder that they've had to resort to doing this. Think about it, if you were managing your personal finances and something was costing you too much, you'd probably try to mange it somehow.

      Its not a good time to be here in the UK at the moment, things are about to get a lot worse before they get any better. With so much unemployment envisaged for the latter part of the year, I think we'll just have to grit our teeth.

      Speaking of which, I have two cheques for my twins which are over a year old so I better get down the bank and get them sorted out....thanks for the reminder

      As always, great thought provoking hubs.


    • Lady_E profile image

      Elena 7 years ago from London, UK

      Hi Happyher - its very nice that there is something set up for your children. I think it helps parents too, so you don't worry about money when the kids have grown up. Regards. :)

    • HappyHer profile image

      Tracy Morrow 7 years ago from Cleveland, OH

      I would've liked to have had something like that for my children. They have stocks and bonds that help, but the price of education here is very expensive.

    • Lady_E profile image

      Elena 7 years ago from London, UK

      ** How are you K9keystrokes - I would say its the previous UK Government that had an invested emotion in the well being of kids. The Coalition Govt we have now are just cutting so many funds. I hope things change in America e.g FREE Health service would be a good start.

      Thanks, its nice to see you.

      ** Hello Support Med - Thanks for sharing whats happening in US. Its not a good idea if it goes to the mum. Here we also have Child benefit. Some spend it on kids, some themselves and some wise ones keep it in a personal savings for the kids. Its interesting to read about other countries. Glad you stopped by. Thanks.

    • Support Med. profile image

      Support Med. 7 years ago from Michigan

      It does sound like UK takes care of their people. Sorry to hear that it is all changing. Guess they're blaming it on the economy. It would be nice if they had the voucher program here where that money has to stay in the bank until the child is 18. Here,unless it has changed, it only applies to children whose mom is on welfare and that money goes directly to the mom, who no doubt for most if not all ends up spending the money because of poverty issues or lack of knowing how to take care of and save the money for the childs future. The change in your country is a big one and I hope that families can find a way to add to that small sum during the 18 years it is in trust. Sometimes, all it takes is a little to build upon. Evidently, we all have to become more conscious of the importance of money and not the greed of it. Voted-up/rated.

    • K9keystrokes profile image

      India Arnold 7 years ago from Northern, California

      It is a preciuos thing when parents take the time to make a better future for their children. Sounds as if Your country has an invested emotion in the well being of these kids,...what a wonderful concept. Thank you for sharing this information Elena,...maybe an American politician will read it and get a good and healthy idea for a change. You do very good work my friend.


    • Lady_E profile image

      Elena 7 years ago from London, UK

      ** Hi Equealla - Its nice that you have private investments, at least the provision is there. Thanks for visiting. Ps. I will be adding "zilz" to my vocab. lol

      ** Thanks Hello

      ** Aaawwh Rossimobis - May God help Nigeria. So rich, but the wealth is not going round. Imran Khan spoke on sky news today 6 August (after talking about the blood diamond issue) he said: the West should not allow corrupt leaders of developing countries to deposit Millions in banks abroad, that can’t be justified. This has affected countries like Nigeria so much, but I do know some African families make very good provisions for their kids. We need to get rid of "greed" .

      Enjoy your weekend.

    • Rossimobis profile image

      Chibuzo Melvin Mobis 7 years ago from Biafra

      Well, “thanks” to the Coalition government from 1 August 2010 this £250 payment will now be reduced to £50 or £100 to low income families and from Jan 2011 - it will stop altogether.

      Well thanks to all the presidents of Nigeria,we have crude,five nonfunctional refineries which makes our petrol the most expensive in the world...they export it to Brazil or elsewhere,refine it,bring it back to Nigeria and sell to masses...Very kind of our government.

      Sis, love this hub,it is awesome.

    • Hello, hello, profile image

      Hello, hello, 7 years ago from London, UK

      Very informative hub.

    • equealla profile image

      equealla 7 years ago from Pretoria, South Africa

      In South Africa we have private investment schemes for parents to choose from, to invest in the future of the kids. But the government here give zilz. You are lucky to have this. I think it creates a better awareness for young parents to prepare for the future!

    • Lady_E profile image

      Elena 7 years ago from London, UK

      Thanks Mike - I like that sentence. "All children deserve a shot at a decent future." As you wrote we do get some nice government benefits but they are cutting it all now. Glad you visited and hope you are in better spirits now. :)

    • Mike Lickteig profile image

      Mike Lickteig 7 years ago from Lawrence KS USA

      Hi, Elena. What you have described seems a great way to plan for the future of UK kids. I wish America had something comparable--too often a child's future is decided almost from the outset--a child born into a low-income family often has few options for his or her future. Mentalist Acer is right, it sounds like you do get more bang for your buck there. I wish it were so here, as well. All children deserve a shot at a decent future.


    • Lady_E profile image

      Elena 7 years ago from London, UK

      ** Hi Kaltopsyd - glad you found it useful and liked the pictures. :)

      ** It's an excellent way Lorlie - I understand they need to cut it, but why so drastically? Thanks so much for stoppping.

      ** Hi Philipo - thanks for your comments. It would be nice if it could be adopted in Africa. (even on a small scale). I spent my teen years in Africa, my Dad didn't have a Trust Fund for me, but on my 18th, he opened my First Bank Account for me with a very large amount and kept on topping it up monthly. It was a good foundation for me. Best Wishes.

      ** True Nancy - I'm not so sure about this Coalition government. Oh... and about wars. It was nice to know that Obama delivered on his promise. Something about all troops coming home by end of August. That's good news, should save some money too. Always a pleasure to read from you... :)

      ** Lol always exploring - England does take care of people but at the expense of its core citizens. This is why immigration is extremely high and benefit/welfare claims are so high too. Anyway, we hope for the best. Thanks.

    • Lady_E profile image

      Elena 7 years ago from London, UK

      ** Hi Mentalist Acer - "you guys get bit better bang for your buck;". I'll remember that phrase. Well, we do in a way especially when you think of the health service. Its free. All prescriptions are a set small amount and if you are not working - you get it free. Hope Obama can do the same for you guys. Cheers.

      ** Hi Allan - I agree. It's perfect. Even for parents who can't afford to pay extra into the Trust fund. Imagine the good it will do when the kids is 18. £250/£500 is a lot of dosh. Thanks.

      ** Waving at yah, Suny. :)

      ** That's a pity Peter - I hope the present government change that "culture" of rich getting richer etc. Regards.

    • always exploring profile image

      Ruby Jean Fuller 7 years ago from Southern Illinois

      Very informative hub, sounds like England takes good care of it,s people I agree with Mr. Maida above. The rich gets richer and the poor gets poorer.


    • profile image

      Nancy's Niche 7 years ago

      Very interesting Elena and it doesn’t surprise me that your government attacked the children’s funds first. They sound every bit as bad as our government. It's all about the rich, getting richer and to heck with the poor and elderly. Our taxes keep getting higher so our leaders can spend it on wars we don't need to be involved in.

      Excellent hub and thanks for sharing what’s happening on your end of the globe…

      Cheers & Blessings!

    • Philipo profile image

      Philipo 7 years ago from Nigeria

      I wish this comparison was made with an African country. Anyway, there is no better time to start saving for your child now from the 1st day.

    • lorlie6 profile image

      Laurel Rogers 7 years ago from Bishop, Ca

      I'm sorry your government has seen it fit to cut back these funds, Elena. I think this is an amazing way to plan for the future-of the children and the nation.

      Great work!

    • kaltopsyd profile image

      kaltopsyd 7 years ago from Trinidad originally, but now in the USA

      Thanks for the educational Hub. Now I know something new. I just have to add: those pictures are simply adorable. Good Hub!

    • Pete Maida profile image

      Pete Maida 7 years ago

      I do not believe American Welfare is getting bigger. The US cannot do something like that because we still have this great phobia of anything that hints at socialism. Everyone still thinks trickle down is going to work and the top people just keep getting richer.

    • profile image

      suny 7 years ago

      Pretty in Pink.

    • Allan Douglas profile image

      Allan Douglas 7 years ago from Great Smoky Mountains, Tennessee

      Do we have something similar in the US? Yes, ma'am; it's called welfare and the program gets bigger and bigger all the time. I don't know that we have anything as sensible as your voucher/savings program. To me that seems like a cost effective way to help your children get to college; let the banks pay for it!

    • Mentalist acer profile image

      Mentalist acer 7 years ago from A Voice in your Mind!

      I don,t know how the United States seemingly high taxes compare to the United Kingdom...but it it seems like you guys get bit better bang for your buck;)Thank for the know about Lady_E;)