Axing CTFs ‘could result in future debt’

The young people of today could face debt troubles in later life because of the government’s decision to abolish Child Trust Funds (CTF).

This is the suggestion of Andrew Hagger of Moneynet.co.uk, who said the action would discourage children from saving for their future.

Mr Hagger acknowledged that the budget deficit needs to be reduced but warned that the UK must not lose sight of the importance of putting money aside for years to come.

The specialist argued that if the CTF scheme had continued, by 2020, “there would have been [a] stream of 18-year-olds entering adult life on a much sounder financial footing than previous generations.”

He asked whether it made economic sense to have “wiped that out in one fell swoop”.

David White, chief executive of the Children’s Mutual, recently argued that CTFs can provide a valuable savings platform for kids regardless of their family background and upbringing.

By Joe Shervin