Child Trust Funds (Hansard, 7 January 2004)

§ Mr. Gardiner
To ask the Chancellor of the Exchequer what information will be provided to(a) children and (b) parents to show them how different investment scenarios will affect the return on their child trust funds, with particular regard to how (i) equities, (ii) cash and (iii) bonds are likely to perform. [145697]

§ Ruth Kelly
The Government want parents to engage actively with the child trust fund (CTF) and recognise that, for many parents, this may be their first investment product. We will provide resources to ensure parents are helped to make choices about their child's CTF, including an information pack, which will be issued alongside the CTF voucher and a dedicated CTF website.
Information will include illustrations of investment returns, which will also be of interest to children as they grow older. Annual statements issued by providers to all children, and teaching and learning resources for use in the classroom, will also help children engage with their accounts and develop an understanding of how different investments could affect returns.
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§ Mr. Gardiner
To ask the Chancellor of the Exchequer what assessment he has made of the implications for those on non-family benefits should they wish to make contributions to child trust funds. [145700]

§ Ruth Kelly
Money held in children's child trust fund (CTF) accounts will not affect family benefits claimed by a child's household.
The Government will keep under review the treatment of capital in income-related benefits so that a sensible balance is struck between providing state support and not unfairly penalising those who have acted responsibly by saving. As a first step, the Government announced on 15 December 2003, Official Report, column 1344 that, from April 2006, the £3,000 threshold above which savings reduce eligibility to income support, jobseeker's allowance, housing benefit and council tax benefit will be increased to £6,000 in line with pension credit.
The pension credit rules include protection against capital deprivation to deal with cases where the real reason behind disposing of savings is to access pension credit or increase the amount of pension credit payable.
Whether payment into a CTF is treated as a deprivation of capital will depend on all the circumstances of the case. However, in most cases it is unlikely that modest contributions to a CTF would be treated as deprivation of capital.