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&#39Treasury and Revenue free of CTF misselling claims&#39

The Treasury and the Inland Revenue will be protected from any misselling allegations over child trust fund allocation, according to the Government&#39s response to the Treasury select committee&#39s second report into the CTF.

The Government&#39s response to the select committee&#39s report, published last week, disregards the committee&#39s advice to review the method it will use to allocate funds for families who fail to pick a provider for their child&#39s fund.

The CTF Bill says the Revenue will open an equity-based account and choose, by rota, the provider to manage the account.

Last week&#39s response states that legal advice obtained by the Government indicates that in the event of any subsequent difficulties, any accusations of misselling would be unsuccessful.

Committee members such as Labour MP Angela Eagle have raised concerns that the Government could face allegations of misselling if it places savings from low-income families with limited financial knowledge into equities.

The Building Societies&#39 Association and other groups have lobbied the Government but it is sticking to its commitment to equities for the CTF&#39s default option.

The BSA says that while investors will be shown comparative returns for funds invested in equities and those in cash, they may not be made fully aware of the comparative risks.

Spokeswoman Rachel Blackmore says: “People with the least financial capabilities will be the very people whose money will be put straight into equities apparently at random which will be totally inappropriate.”

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