More an 'Am I in fact mental?' I suppose...

[curiositykilled]

I really dislike the money the Government give each child for the 'Child Trust Fund'.

My main issues are:

1. You cannot refuse it as a parent but you are expected to 'manage' the account for your child. I personally, want my children to work for their money or save it themselves or at the very least for me to have control/choice over my own financial responsibilites and those of my minor children.

1. The money will be worth different amounts for each child which is not fair.

1. It is a massive waste of Government cash - the money is likely to be worth nothing 18 years from when it is given.

1. It is hard to tell whether 18 year olds in the future will need the cash whereas it is clearly today's 18 year olds would benefit greatly from a £250 cheque in this recession.

Basically I think the money will be wasted and would if the Government wants to give handouts to 18 year olds they should give them to the 18 year olds of today.

I realise it is free cash and you may will all think I am a bit insane for actually moaning about it I am interested to see if anyone agrees with me?

No, you are not mental.

However the people that thought up and implemented the scheme are in fact mental.

I didn't open an account as I couldn't find an ethical one, so the govt put it wherever they put it. It's not worth about £140, so very glad I didn't throw any of my own money after it. His GPs OTOH run a cash-savings account for DS, and put something in every Christmas and Birthday (with a token something to open), so I think DS is considerably more in credit than I am!

In the current economic climate, it doesn't seem a good idea and money would be better spent on more urgent needs. 18 year olds aren't generally known for their financial savvy (I know there are exceptions) and I envisage a lot of beer being bought with this Govt handout.

peanutbutterkid - perhaps I should clarify what I mean about point 4. It is more that if the Government think 18 year olds should have a lump sum (I don't but it is basically what they are implying in their CTF scheme) I'd rather they gave it to 18 year olds now than babies whose parents would be forced to manage it for 18 years only for it to be worth absolutely nothing. If you put it in stocks and shares it will go up and down but if you put it in a safer savings account it'll be worth peanuts.

and that there could be an argument for people needing a lump sum now but how can anyone tell whether our babies will need a lump sum 18 years from now?

Def think it's a waste of money (as is the health in pregnancy grant) but certainly not going to refuse. We've opened a savings account for DD as well and gifts etc will go into that. Not so worried about her not spending it sensibly at 18 but we might want her to be able to have some of it before then if she has expensive hobbies or something. I'd of thought most people who can would have opened savings accounts for their dcs anyway.

leftangle - It's that you can't refuse that is bothering me. There is no facility for refusing because it is money for the minors you are ward of but you as a parent are forced to manage it for 18 years.

Mental. Period.

I have put my DD 250 into an account with The Brittania. It is a CASH CTF rather than a SHARES CTF so It doesn't depend on the stock market. It depends on the interest rate only. So, with all intents and purposes it is the same as a savings account. The rate of interest is about 5-6% and this is what she got last year.

As I said above, I'm not going to tell her about it and hopefully she wont find out about it between now and then. I'm hoping that when she's 18 she will take the money out and put it in a high rate savings account somewhere else so she can continue to save for a home deposit.

She also has a savings account with the Halifax where all money from birthdays and christmas go in. I'm going to tell her about this either! Mean, but a good idea in my opinion.

When she's old enough she can open another account where she can decide what happens to her money (save or spend) but she's not getting access to the Halifax account.

Ds was one of the first to be able to get it. We got the letters etc - but never bothered tbh. Apparently, if you don't bother to do anything, the goverment set up an account anyway. So, out there somewhere is an child trust fund with ds' name on it. Lord knows where though.

Um, maybe I'm a tightwad but I can't understand how anyone can be annoyed about someone helping them start a savings account for their child?

There are lots of poor families that otherwise would probably have little or no savings their their children if it wasn't for the child trust fund.

Also I don't understand the comment about parents having to "manage the account". If you don't want to you don't have to manage anything - just let the money sit there and if you don't contribute anything to it thats your decision.

Skimmed v quickly through thread and agree with 2 things which have already been said

1. the real beneficiaries are the financial institutions.

1. it's another way to lessen the pressure on govt to provide financial support for students.

I agree with you curiositykilled - waste of time and money if you ask me! My son doesn't have an account but my daughter does, and we left it so long to invest the cheque we received when she was born the government did it for us. We already set up an account for each of our children that we can access when we want, so we couldn't put the money together with that one.
And really £250 doesn't go very far, (even less so in the future) - especially if you are looking at university fees etc, and parents who are going to save up for their children's future would have done so anyway regardless, everyone else most likely are unable to afford to invest regular amounts of money into an account for their child/ren, so handing out wads of cash they are unable to add to is pointless really...

Quite apart from wondering why anyone in their right mind would go for the share-linked CTF rather than the cash one (I work in banking and wouldn't trust stockbrokers/fund managers further than I could throw them), I'm not sure why this needs to be a universal gift.

We're in the happy position of being able to save regularly for DD (which we do in a separate account), so nice though it is to have this money, we don't need it.

There are others out there who, as scaryhairycat says, are unable to afford to invest regular amounts, so could do with getting a bigger lump sum in the first place. Some element of means testing should apply, surely?

abubu - if you have more than one child you will have to try to keep the money in each the same. You have to notify them when you move and if the bank or building society has a merger you will have to make decisions about the account.