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Economic inequality

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1357526.  Tue Sep 01, 2020 7:40 am Reply with quote

It's funny how easy it is to forget something you felt so passionately several years ago because the news cycle moves on, and you suddenly get a reminder of it.

In this case, it's the Child Trust Fund, one of those schemes Labour set up when in power which at the time looked like a huge step to helping families with lower incomes create some savings for their children. At the time I seem to recall conversations about whether this could lead to a testing of Universal Income.

The idea was simple. Each child born would receive 250 savings vouchers (I think it was 500 if you qualified as from low income family), and this allowed your family to add more. Similarly, another voucher was given at age 7.

At the time the surprise was that, while conservative voters and some MPs seemed against the idea, I think the party mostly voted for, and some abstentions (I haven't looked at the records, so if wrong, I'm sure someone will provide the details), but the Lib Dems were really against the idea, and I never really remembered why.

When the coalition came in they didn't waste much time in scrapping the vouchers and replacing them with Junior ISAs, which helped families save for their children, but took away that push that got many of them started.

And today we see the result, with 18 year olds finally able to get their hands on their money. However, only kids who turn 18 between now and the next 8 years will benefit from this scheme, after that it's back to normal.

Hopefully many will have had families that continued to put funds in and built a nice starter in life, but even for those who didn't, a 1,200 start or thereabouts should be great help considering the current economic situation many young people find themselves in.

Considering how much was spent on the furlough scheme, the eating out scheme, and others, and the smaller cost of this scheme (plus the extra income to the economy from millions of new investment funds), perhaps parliament should look again at introducing savings vouchers.

I won't hold my breath though.

1357531.  Tue Sep 01, 2020 8:06 am Reply with quote

My niece turned 18 recently, but I don't know if my brother and his then wife did this. I shall have to ask him.

1357546.  Tue Sep 01, 2020 10:53 am Reply with quote


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