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M&G urges Government to bring in children&#39s Isa

M&G is calling on the Government to launch a children&#39s 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&#39s 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&#39s Isa will benefit the

entire financial services industry and will create a robust UK savings

industry.

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&#39s ability to revolutionise the UK savings

culture.

He says: “Weren&#39t Isas supposed to reach seven million new savers? I do

not bel-ieve that any product on its own can revolutionise savings habits.”

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