Why?

[Guest Grim Reaper]

Details of the £250 child trust fund the Chancellor announced in this year's Budget are now available. They reveal plans for a second payment to be made by the Government when children are seven.

Every child born after 1 September 2002 will qualify for the fund, which will rise to £500 for the poorest children at birth.

Young people will be able to access the fund when they turn 18, giving them extra security and opportunity in adulthood. It will also give them experience of savings and investment and help them to manage their finances better in later life.

Detailed plans published today mean that:

The government will make another payment when children are seven years old. The size of the payment will be confirmed at a later date;

Family and friends will be able to contribute up to £1,200 a year between them to the fund;

There will be no need to make a claim for the fund - access will be automatic through the child benefit system;

Providers will be able to offer a variety of accounts;

There will be no tax on income and capital growth; and

Special arrangements will be made for children in care.

Financial Secretary Ruth Kelly said the fund is "a leading example of the government's commitment to an active welfare strategy based on the principles of security, opportunity and responsibility for all".

10 downing street

is this really a good idea....to those who are well off it won't make a difference, and for those who are poor it wont go far at all....and in 18 years time £500 will be worth nothing, leading to the question whats the point.............

[andsome]

It's yet another waste of good money. It will not make an earth shattering difference to each individual, but will cost a lot of money which could be better spent elswhere.

[-pops-]

- - - and probably cost more to administer than the handouts it provides.

[Guest northamuk]

Well, with interest it should probably buy 2 big Macs and a large Coke.