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Child trust funds still face uncertainty on charges

The final shape of the child trust fund remains unclear.

The joint Treasury and Inland Revenue team has taken more than two years to develop the proposals but has failed to conduct any qualitative research on who will use the funds.

A bill was included in the Queen&#39s Speech but no decision has been made on charges. Several major providers have said they would be unwilling to make a commitment to the funds if they are forced to offer them at 1 per cent.

The scheme is set to launch early next year, with 250,000 babies born on or after September 2003 getting an initial endowment. The Treasury has released no details on the level of subsequent top-ups.

The Building Societies Association believes 25 per cent of societies may be excluded from the plans because they cannot offer the equity-based option.

BSA head of savings policy Brian Morris says: “We hope that by the time this bill is introduced, the Treasury will have taken on board the concerns of building societies. Any organisation that wants to play a part in making CTFs a success should be able to do so. In addition, there needs to be a real consumer choice especially for those who need a risk-free fund because they can ill afford to lose their initial deposit.”


&#39CI guarantees will stay but become more expensive&#39

Guaranteed rates will still be available in the critical-illness market in a year&#39s time, according to Lifesearch senior technical adviser Kevin Carr. Following talks with reinsurers and providers, Carr says he is confident that guarantees will still be available next Christmas. In Lifesearch&#39s inaugural quarterly protection market report, he warns that there are likely to […]

LEBC eyes expansion after profits leap by 84%

National IFA LEBC Group nearly doubled its profits to £314,000 in the year to May from £171,000 the previous year. The firm, which launched in June 2000, headed by former Towry Law-owned Advizas advisers, saw a 19 per cent rise in turnover to £5.1m from £4.3m. LEBC says it hopes to increase its number of […]

Countrywide proposes sale of life assurance operations

Countrywide Assured has proposed the sale or demerger of its life assurance operations. It believes there is no longer any compelling reason for the life business to remain part of the group, as the capital requirements and investment propostions of the two businesses are entirely different. It says that since it substantially closed the life […]

No change in Bank of England base rate

The Monetary Policy Committee voted today to keep base rate at 3.75 per cent for another month. This was largely expected by the industry following a 0.25 per cent increase last month. Charcol senior technical manager Ray Boulger says: “Any decision other than no change would have been a major surprise &#45 we do not […]


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