There has been a scramble by product providers and thinktanks to claim authorship of the Government “baby bond” proposals although the idea has been dismissed by many IFAs.
Under the proposals announced last week, children will get an endowment of £800 to help give them a start in life, with strict guidelines applying to how the cash is invested.
The payment will be made in four instalments with an initial payment of £500 at birth, followed by payments at five, 11 and 16. Children whose parents' income puts them over an unspecified threshold would receive half the sum.
Tunbridge Wells Equitable Friendly Society was quick to point out it had already registered “baby bond” as the name of its own proprietary child saving plan. AMP director of corporate affairs Richard Astle says AMP spon- sored the research of the left-leaning thinktank, the Insti-tute for Public Policy Res- earch which put forward the idea. But rival right-wing thinktank Adam Smith Institute claims it mooted the concept in 1995.
But the proposals received a thumbs down from IFAs, with Michael Philips partner Michael Both claiming the plan is pre-election bribery.
Fiona Price & Partners director Donna Bradshaw questions the source of Treas-ury advice. She says: “The Government never consults with IFAs, and relies instead on market research from provider sausage factories. This will just end up giving money to the hideously wealthy – it is gilding the silver spoon.”
Informed Choice managing director Nick Bamford says: “The cynicism of IFAs comes from us being continually lectured about low cost products that do not require advice by a Government which has marginalised us. We are repeatedly being told to target ourselves at the high net worth market. So when we are asked about proposals such as this it is not surprising we are not enthusiastic.”
AMP view, p16