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Tories to axe Child Trust Funds for majority of families

The Conservatives have announced they will only continue Child Trust Funds for the poorest families and disabled children if they win the general election.

Speaking at the Conservative conference in Manchester today, Shadow Chancellor George Osborne said a Tory government would continue to fund CTFs for the poorest third of families and for disabled children.

He said: “We will preserve child benefit, winter fuel payments and free TV licenses. They are valued by millions. But quite frankly Child Trust Funds have not been as successful as many like myself hoped. We should continue paying them to the poorest families who often have no savings, and encourage them to use them more – but, let me tell you today, handing out new baby bonds to the rest of the country is a luxury we can no longer afford.”

Osborne said offering CTF payments only to disabled children and the poorest one third of families would save £300m a year.

Osborne said his previous proposal to raise the inheritance tax threshold to £1m will not now be a priority for a first Conservative Budget, but he pledged that it would be brought in during the first term.

He also says the Tories will also look to means-test the Family Element of the Child Tax Credit at a lower threshold as a way of stopping payment of tax credits to households with incomes in excess of £50,000.

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