Good news, that is, for those children born after September 2002! You may recall that children born since 1 September 2002, who have Child Benefit awarded to them and live in the UK qualify for a Child Trust Fund (CTF). Parents of qualifying children receive a £250 voucher to invest in a tax free savings account (£500 for children from lower income families).
In his 2006 Budget speech the Chancellor announced the amount of the second CTF payment due to qualifying children on their seventh birthday. Another £250 will be added to their accounts (£500 for children from lower income families). The government will also consult on making further payments to secondary school age children.
In other CTF news, it seems that a number of parents are waiting until the last few days before expiry of their CTF voucher before attempting to open a CTF account. Last minute internet or telephone applications cause particular problems for account providers, if the CTF voucher is received by the account provider after the expiry date. In response, the government has amended the CTF regulations to allow a seven day period after the expiry date for parents to get the voucher to their chosen provider. If parents do not, HMRC will open an account on behalf of the child.