View more on these topicsNews
Last week, the Government unveiled the child savings vehicle as it sent out seven million letters to potential claimants of child benefits. >From next April, parents of children born from September 1, 2002 will receive a voucher worth 250 to be invested in a tax-free savings fund. Parents who earn less than 13,000 a year will get a further 250. The vouchers will be paid into the savings plan which will charge no more than 1.5 per cent commission. Any money not invested within 12 months will then be invested into a default stakeholder fund. While some IFAs remain non-plussed by the scheme, Chelsea Financial Services has committed to selling CTFs and hopes that they will boost consumer saving. Chelsea managing director Darius McDermott says: “They are a great scheme and will give children a good start in life. The money from the fund could be used for a deposit for a house or for paying university fees.” The Financial Management Group partner Chris Mellor says his firm is unlikely to sell CTFs. “It’s just not worth it. All you would make on it would be 3.75. It’s another one of these Government wheezes for lowincome people,” he says.