The Treasury and Revenue & Customs will be grilled next week over the dismal public awareness of Child Trust Funds (CTFs), one of the Government’s flagship anti-poverty policies.
The Government has repeatedly come under fire from critics since announcing the scheme in 2003. Two years ago, industry experts claimed that two multi-million advertising campaigns, created by M&C Saatchi, and a further direct marketing drive had been largely ineffective (MW January 12, 2006).
In January last year, the government’s own figures showed a quarter of parents had failed to invest their CTF vouchers. The Treasury Sub-Committee, chaired by John McFall, is holding an evidence gathering sessions with the departments next Wednesday. It will scrutinise why there is an apparent lack of awareness of CTFs and how better to promote the vouchers.
The vouchers are worth between £250 and £500 to children born after September 2002. Parents are given 12 months to open a CTF account. If they don’t, accounts are automatically opened in a randomly chosen scheme but they lose up to 12 months of interest payments.
The committee will ask ministers, including Economic Secretary Kitty Ussher for evidence on a number of other topics including: reasons for lack of awareness; issues involving CTF providers; and the future of the scheme.
Last month, HM Revenue & Customs announced it was creating a CTF podcast in a bid to encourage understanding and take-up of the vouchers. The five-minute podcast discusses the best accounts to choose and how family and friends can top up the accounts. It is available from HMRC’s website or from Apple’s iTunes store.