View more on these topics

Treasury pledges an open market for CTFs

After two years and three rounds of consultation, the Treasury has finally announced the launch of its Child Trust Fund savings initiative, although final details will not be published until the summer.
The scheme, which is expected to be available from 2005, will see initial cash endowments of £250 for every child born since September 2002, rising to £500 for the poorest children.
Additional contributions from the child&#39s relatives of up to £1,000 a year will be allowed into the funds, which will be locked away until the holder reaches the age of 18.
The Treasury has reaffirmed its commitment that the funds will be sold on the open market but final details on product specification, sales regulation, limits on investment risk and details on contribution incentives will not be published until the summer.
In his Budget speech, Chancellor Gordon Brown said there are 700,000 children born each year who would benefit from the plan. He also said when it was launched it will be backdated to September.
Conservative leader Iain Duncan Smith immediately attacked the scheme in his response, saying it would only serve to over-complicate the savings process and extend means-testing even further.
Brown said: “I can tell the House that for every child born from today we will establish in their name a Child Trust Fund…The Child Trust Fund symbolises the difference between those who believe in modernising the welfare state and those who wish it to wither away.”
The Marketplace investment expert Ken Rayner says: “As an industry already suffering from poor performing stockmarkets and low interest rates there needs to be clarification as to how commercial companies can deliver such a trust fund.”

Recommended

Removing the tax charge on certain group life policies

A group life policy is one that insures the lives of a group of individuals and pays benefits on each death. Multiple payments of death benefits can lead to unintended charges to tax on either the lives insured or the policyholder. This is because a policy which can pay benefits on the death of more […]

Outside edge

I have a lot of sympathy for Nationwide&#39s stance on the equity-release market. It is clearly both nonsense that two alternative and equally valid solutions to the burgeoning requirement for the elderly to augment their income by using the equity in their home fall either side of the regulatory divide. They are also correct in […]

Skipton Guernsey – 3 Year Step Up Bond Issue 8

Wednesday, 9 April 2003 Type: Offshore high interest account Minimum-maximum investment: £10,000 – £500,000 Place of registration: Guernsey Interest rates: Up to £49,999 &#45 3.4% gross a year until April 27, 2004, 3.9% until April 27, 2005, 4.1% until April 27, 2006. £50,000 and above &#45 3.45% gross a year until April 27, 2004, 3.95% […]

Zurich Financial Services – Zurich Guaranteed Account

Friday, 11 April 2003 Type: Capital protected bond Aim: Growth linked to the performance of the FTSE 100 index Minimum-maximum investment: £2,500-£250,000 Term: Five years six months Guarantee: Original capital returned in full regardless of performance in the index Return: Up to 100% growth at end of the term or 30% growth at end of […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com