asked Her Majesty's Government:

How they plan to increase the uptake of the child trust fund.

My Lords, the Government are encouraged that three-quarters of child trust vouchers have been used by parents to open accounts for their children. The Government are continuing with efforts to help new parents to understand the choices available and to encourage them to open a child trust fund account for their child, such as through partnership work with the voluntary and community sector to provide extra help for less financially confident families.

My Lords, I thank my noble friend for that encouraging reply. This is such an excellent scheme that it is a pity that all families do not take advantage of it. Is there evidence showing precisely which families are not using the scheme and how they can be targeted to improve matters?

My Lords, we have been concerned that the scheme should be a success but we regard 75 per cent at this stage as encouraging. As we want as many parents as possible to take advantage of the scheme, there has been a significant amount of marketing activity: a special day was devoted to the subject, advertisements were placed in magazines, and the voluntary and community organisations have been helping greatly to spread the benefits of the scheme. But we are only in the third year and a great deal still needs to be done.

My Lords, to take up the noble Baroness's point, can the Minister confirm that the take-up of child trust funds in the most affluent areas is over 80 per cent whereas in the least affluent areas it is barely over 50 per cent? Does that not demonstrate that many of the parents who are expected to benefit most from the child trust funds simply do not know what the scheme is about?

My Lords, I am grateful to the noble Lord for identifying the issues even more graphically. The take-up rate among less well-off families is much lower than it is among more affluent families who see the advantages of the scheme and have the confidence to invest in the financial product. We are doing everything we can to extend the scheme to as many people as possible. The noble Lord is right that we have to concentrate our efforts a great deal more on less well-off families.

My Lords, I declare an interest as the former chairman of the Children's Mutual. I congratulate the Government: they have done a fine job in launching this programme. The fact that 75 per cent of our young people will eventually have reasonable savings is greatly to be welcomed. It seems that the problem lies in the fact that more than half of parents are new parents. Will the Government therefore give a commitment to ensure that there is major marketing activity every year? Unless you achieve that, you will miss out every year.

My Lords, I thank the noble Lord for the constructive remarks at the beginning of his question, and I agree with him on the latter part of his question. The Government have a substantial amount of work to do with new parents, which is why we give a 12-month period before requiring take-up. Even if take-up has not occurred then, the Government will make their contribution at the end of the year. However, that contribution will mean little unless the parents are also encouraged to contribute to the savings scheme. We have a great deal to do. As I think we are all aware, financial literacy in this country is much lower than we want. It is demonstrated by the relatively limited take-up among certain sections of our community.

My Lords, deprived families have not been taking up the scheme as quickly as other sections of the community. What targets have the Government set themselves for ensuring that a higher percentage of such families opt into the scheme?

My Lords, the House may be relieved to hear that we do not set targets in this area, but we have ambitions. The scheme is meant to help all children in our society and their parents to invest in their future, but, as the House has readily anticipated, that is more difficult with certain sections of the community than with others. That is why we are working hard to promote greater financial understanding and using extensive advertising directed at such families. We are reliant on the community and welfare organisations that can reach parts which Governments sometimes cannot reach and can help to promote the significance of the scheme.

My Lords, figures released by the Treasury show that 2,830,000 children are eligible for child trust fund vouchers, but that only 2,753,000 vouchers were issued. For noble Lords who are not quite as quick as they were on mental arithmetic, that is 77,000 vouchers that have not been issued. What are the Government doing about that?

My Lords, even the best-run schemes have certain elements that leave a margin of difficulty. As the noble Baroness will recognise, the scheme is working well overall. The Government have to be satisfied that they have successfully identified who should be the recipients of the child trust vouchers, and the noble Baroness has probably indicated in her figures how limited and small the administrative problem is in comparison with the success of the scheme as a whole.