June 20 2013 Latest news:
Adam Aiken, Editor
Wednesday, February 29, 2012
Vulnerable children in care are to be given the opportunity to benefit from the latest savings vehicle for young people.
The government has unveiled plans that will allow donors to give money to children who will have junior Isas opened for them.
The accounts will be opened for youngsters who have been in care for more than a year and who do not already have child trust funds (CTFs), and charitable donors are also being sought as top-up contributors.
The government said it would kickstart each account with £200, and it has appointed the Share Foundation, a charity, to help open accounts for an estimated 55,000 children in the first year of the scheme.
Junior Isas represent an extension of regular Isas, and were introduced last year after the government scrapped the previous CTF system.
It said CTFs – which involved all children being given government vouchers of at least £250 at birth and then top-up payments of at least £250 when they turned seven – were too expensive. The idea behind junior Isas was to extend the savings culture to children without the taxpayer having to make contributions to millions of accounts.
The latest move on behalf of children in long-term care is to give them some of the benefits enjoyed by children who have friends and family contributing to their accounts.
A junior Isa can be held in cash or shares, and will remain locked away until the account-holder’s 18th birthday.
Children’s minister Tim Loughton said: “These children are some of the most vulnerable in our society and we are committed to investing in them so they can thrive.
“I want these savings to be worth much more than £200 by the child’s 18th birthday, and I hope individuals and organisations will also want to use these accounts to contribute and invest in the futures of these vulnerable children.
“The savings will help them when they reach 18 and they are facing serious choices as they start out in the adult world.”
Gavin Oldham, chairman of trustees at the Share Foundation, said: “Our appointment presents a major opportunity to achieve our long-held objective of providing targeted and mainly voluntary-sourced inheritance in the form of financial resources and financial capability for some of the most disadvantaged young people in our community.
“We acknowledge the government’s initiative in making possible the identification of these children and young people and the opening of their savings accounts with £200, even in these times of austerity.”
Barnardo’s chief executive Anne Marie Carrie said: “It’s absolutely right that we help give children in care the same opportunities and aspirations as other children.
“This money will provide them with vital financial support at a critical time as they leave care, and we encourage anyone looking to donate to a worthwhile cause to contribute to the scheme.”