Child Trust Fund: Eligibility

House of Lords written question – answered at on 21 March 2005.

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Photo of Lord Colwyn Lord Colwyn Conservative

asked Her Majesty's Government:

Whether they will review the provision for those individuals, the so-called "missing millions", who were born before 1 September 2002 and therefore do not qualify for a child trust fund.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

The child trust fund goes live on 6 April 2005. The Government have already backdated eligibility to September 2002. Older children can benefit from tax-free saving too. The market offers a wide range of savings and investment accounts designed especially for children from national savings and investment products to friendly societies, banks and building societies. The Government will continue to monitor the situation and would be happy to speak to providers on the issue.

Every child has a personal tax allowance of £4,745 a year and parents are taxed on their child's account only when the gift produces more than £100 gross income per year, per parent.

Parents can also save without having to pay tax through ISAs and in the Budget, the Chancellor announced that he would be extending the existing higher ISA limits of £7,000 with a maximum of £3,000 in cash through to 2010, providing parents with an opportunity to save for their children's future.

The child trust fund offers new opportunities and new incentives that never existed before. In conjunction with other saving products offered by the market it will help to encourage saving for all children. The Government keep all saving incentives under review.

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