M&G is calling on the Government to launch a children's Isa as part of its
baby bond initiative.
The child trust fund sch-eme, which is under Government consultation, was
first suggested in the Treasury's Savings and Assets for All paper,
published in April.
The scheme would provide a lump-sum saving plan for every new baby, with
top-ups at five, 11 and 16 years and maturity at 18 or 21.
But M&G is calling on the Government to build the funds into an Isa
wrapper, giving friends and family the chance to top up the funds while
keeping the investment tax-free.
Director of sales and marketing opportunities Jeffrey Mushens will take
part in a Treasury consultation next week. M&G is the only fund management
company to be involved in the discussions.
Mushens believes the introduction of a children's Isa will benefit the
entire financial services industry and will create a robust UK savings
He says: “We want to build up something that will work. The reason for
using Isas is that it is an existing administrative environment that we all
know and, second, it will allow family and friends to top it up. Why create
a new product?”
Schroders marketing director Robert Higginbotham is slightly more
sceptical about the baby bond's ability to revolutionise the UK savings
He says: “Weren't Isas supposed to reach seven million new savers? I do
not bel-ieve that any product on its own can revolutionise savings habits.”