I don’t know what to make of this. The Government, and Gordon Brown specifically, have pulled off the deal to give new Babies at least £250 in a baby bond.
The Child Trust Fund is set to give every baby born on or after the 1st of September 2002 a Government handout into a special account.
I’m really not sure what to make of this, is it a good thing that the Government is investing money in children so that they can pay for their required Government increased education loans. Or is it a bad thing that a Government and Society who find that there are more younger, poorer Mothers than ever before is sponsoring people to have children?
The fund offers something between £250 and £277 for the child, however for children from the poorest families, this will be £500. A further Government payment will be made on their seventh Birthday, the amount of which is yet to be decided and parents can deposit up to £1,200 per year tax free.
The heartening news, although the information of how this is legally done is unclear, is that the money is locked away until they are eighteen and only available to the child. I hope that this is watertight and that the parents can’t use it, since it will be tempting for those families who are struggling to use it to tide them over, and replacing it could be a difficult prospect.
The bad news here is that at the age of eighteen the children can take the money out and do with it what they like. Now if I had known I had that kind of money at eighteen I would have taken it all out and spent it on a car or some computer equipment, and I’m the sensible one in the family so god knows what my Brother would have spent it on!
I really do think this has the potential to send out mixed messages and that it is almost an incentive to have children, when we should really be doing the opposite and trying to control the amount of youger parents.
It may be good that the account is locked to all but the child, but getting full access at eighteen is a potential disaster, with the opportunity for the child to blow the money or even be influenced by their parents. Really this age limit should be much higher, and the child is allowed to sign over the account to a College or University to pay for fees once they have access, much like an ISA against a Mortgage.
However, I’m not a Politician, and that either makes no sense, involves too much time, cost or common sense and doesn’t win votes.
I hope it doesn’t have the effect I fear it might, and that it helps to give people a choice in their education, and a decent choice at that.