Karen Buck calls for help in pushing take up of the Child Trust Fund

New figures show that 81% of parents are taking up their Child Trust Funds in Wokingham- but this falls to just 69% in Westminster. We should be doing better- and the Council could really help, using ‘Westminster Reporter’ to promote useful information such as this, as a contribution to helping to tackle poverty in the borough, which is, after all, far worse than in neighbouring Camden, Hammersmith or even Brent”Whilst substantial numbers of people enjoy unprecedented wealth, boosted by rising property prices, city bonuses and the like, a large minority of the population remain locked out, with no wealth or savings in their name at all. According to the Family Resources Survey, in fact, 34% of all families have absolutely no savings, and a further 22% have total savings of less than £1,500. Of course, the reality for many of these families is worse still-many are also burdened with debt, and all of them are potentially vulnerable to the demands that life throws at them, from a broken washing machine to the request to finance a school trip.

One of the modest, yet positive, steps taken by the government in recent years, has been to encourage parents to think about saving for their children, by establishing the Child Trust Fund, and offering all new parents ( of children born since September 2002) vouchers to get them started. These vouchers, worth a basic £250 for everyone, and double that for low income families, can be added to through the child’s life by family or friends. Additionally, the government has also indicated that another payment (of £250 or £500 according to household income) will be credited to each eligible child’s account at age 7, and it is quite possible that this too will be extended to other milestones in a child’s life. Of course, the Child Trust Fund alone is not going to make anyone rich, but here again the overall context needs to be remembered: with so many families having nothing at all (and with that same group being over-represented amongst those who don’t go on to Higher Education) even a modest savings account can make a difference and help encourage a savings habit.

That is the good news. Less helpfully, it appears from new figures that around about one third of parents have yet to cash their Child Trust Fund vouchers in my constituency- and, as usual, this reflects the characteristics of the relatively deprived inner city. (The highest take up rates in the country happen to be: South Norfolk, Bury St Edmonds, Mid Sussex, Central Suffolk and Wokingham!). So I shall be doing what I can to get the message out, and to answer questions from local parents about how to make the best use of the Fund, and I welcome any help that may be on offer. We need, for example, to promote take up through schools, nurseries and voluntary organisations, and to encourage the sort of ‘word of mouth’ advertising that is often most effective amongst those less confident with banks and financial services. Meanwhile, if you know anyone who could use a pointer in this direction, please encourage them to either call the Child Trust Fund hotline on 0845 302 1470, or look up the website at www.childtrustfund.gov.uk, or else contact me at the House of Commons, SW1A 0AA.