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Child trust fund details revealed in next Budget

The final details of the Government savings initiative, the child trust fund, are to be announced in the next Budget, Treasury Financial Secretary Ruth Kelly has confirmed.

Speaking at the annual Labour conference in Blackpool, Kelly said the Government was committed to the idea but that final decisions, such as whether to allow the entire market to offer the funds or limit access to a small number of licensed providers, have yet to be made.

The scheme will see cash contributions made by the Treasury into a fund of every child born in the UK from an inception date yet to be set.

Further instalments will be given at fixed periods, thought to be ages five, 11 and 16, with individuals also allowed to contribute.

There are estimates that an entire generation could reach the age of 18 with a fund worth £10,000 once growth is factored in.

At the fringe meeting sponsored by thinktank the Institute for Public Policy Research, Kelly said the reaction from the public to the initial pilots for another Government scheme, the saving gateway, has been overwhelming, with a very positive take-up rate.

Pilots for the saving gateway, which sees the Government match savings of lower earners on a pound for pound basis, started in five cities around the UK in August and will run for two-and-a-half years.

Kelly said: “Everybody should have a child trust fund but the poorest families should have the most put in it both at the beginning and at stages.

“It has the potential to radically transform the futures of people who have this access behind them.”

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