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INFLATION POSES THREAT TO SAVERS

Newborns have received a flat payment of £250 since 2005

Wednesday August 27,2008

MORE than 3.6million children have benefited since the Government launched its Child Trust Fund (CTF) scheme three-and-a-half years ago, but savings experts are warning that future generations could see their nest-egg put at risk by rising inflation.

Stockbroker and CTF provider The Share Centre points out that in April 2005, at the launch of the scheme, children born after September 1, 2002, had their £250 vouchers topped up to allow for lost growth.

Since then, however, newborns have received a flat payment of £250.

“With inflation now running at a much higher level than in 2005, we are calling on the Government to apply index-linking to prevent today’s newborns losing out,” says Guy Knight, from The Share Centre.

“While it is great that children are given this financial start in life, it is not fair that children born today will get £145 less
after inflation than their predecessors.”

Knight says babies born today should receive £288.

“We urge the Government to reconsider the limits and keep them in line with inflation so that every child has a fair and equal starting point for their investments,” he adds.

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