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From 1 September, the first 18-year-olds will be able to access Child Trust Funds set up over a decade ago by Tony Blair’s Labour government. All these accounts received a contribution of at least £250 from the government, with some getting as much as £1,000.
New IFS research, released today, looks at how much difference these accounts will make to the finances of 18-year-olds.
Rowena Crawford, an Associate Director at the Institute for Fiscal Studies, said: "This week will see the first 18-year-olds being able to access their Child Trust Funds, which were set up by the government in the mid 2000s. The accounts actually make a substantial difference to the finances of 18-year-olds. While an average Child Trust Fund balance of perhaps around £650 may not sound very high, this compares with much lower average wealth of £100 among young adults born a year too soon to qualify for an account. Of course there is only so much an account with £650 can do, and it was always far from clear these were the best use of public spending. But for those 18-year-olds whose education is disrupted, or who are struggling in a very difficult labour market, the maturity of these accounts will look remarkably well timed.”
You can read the research here.
