‘I've been much more confident in my plans of attending a university, knowing I have this money to support me if needs be and to help set me up for the next stage of my life.’
The impact on future plans & financial goals — a successful Child Trust Fund recipient
This autumn has not seen much interest in children and young people: quite the reverse, in fact. Whether one considers the ghastly death toll of children in Gaza and Israel, the massive green-washing exercise around COP 28, the UK's exclusion of immigrant families if the breadwinner is earning less than £38,700, or the scale of public debt which future generations will have to bear — older generations have nothing to be proud of as 2023 draws to a close.
You have to go back to the start of this millennium to see a real focus on young people, but the good news for those born in the United Kingdom between 1st September 2002 and January 2006 is that the investment set down for them over that period is now ready for use. Except that, as we reported on 22nd May, much of the Child Trust Fund harvest is in danger of being wasted because over 40% of young adults, mainly from disadvantaged and low-income backgrounds, don't know anything about their good fortune.
So, on Tuesday 5th March next year, The Share Foundation is hosting a major conference at Church House, Westminster, focusing on unclaimed, adult-owned Child Trust Funds. There are now over one million of these accounts worth over £2 billion lying dormant with account providers, because their young adult owners don't know anything about them. These are predominantly HMRC-allocated accounts, where HM Revenue & Customs instructed their opening because no action had been taken by their mainly low-income families by the child's first birthday.
The conference on 5th March will be opened by Ruth Kelly, the former Treasury and Education minister, who first introduced this programme. It will discuss the real benefits realised by young people who have successfully found their accounts, and the work being undertaken to alert those who haven't claimed theirs yet. This will include contributions from NatWest and The Tracing Group, who are sponsoring the event. To close the conference, I will be looking ahead to the opportunity for introducing effective inter-generational rebalancing in the future.
The ‘Unclaimed Adult-owned Child Trust Fund' (UACTF) conference on 5th March will be free of charge: it will start at 9 am for 9:30 am, and the formal close will be at 1:30 pm, followed by a networking sandwich lunch. The Share Foundation hopes it will be attended by a wide range of opinion formers and influencers, including government representatives, regulators, account providers, trade associations, charities working with disadvantaged young people, local authority representatives, financial education specialists, media representatives and young people, and that it will thereby raise the profile of these starter capital accounts just at the time that their owners really need them.
The Share Foundation has already linked nearly 40,000 accounts to their owners and, as a trial process, has offered Share Radios ‘Managing My Money’ course on an incentivized learning basis (£100). Here's a response from one of the participants: ‘Thank you for this amazing opportunity. I have learned loads from this course and hope to carry the information with me into the future. As you will see from my statement I’m not the best with managing my money and hope that this course will help me move forward with repaying debt and making wiser choices in the future. As a university student money isn’t easy and this £100 grant will help pay off some of this month’s debt from my credit card which I am so grateful for’.
The charity is also proposing a new approach to HM Revenue & Customs for automatic withdrawal at the age of 21 using National Insurance links to PAYE, benefits and student loan connections, where the account was opened by HMRC in the first place. This applied for about 1.8 million (28%) of the accounts; The Share Foundation estimates that over half of all unclaimed adult accounts are in this category, and that this automatic withdrawal process should therefore release about £0.25 billion per annum for those most in need.
The Child Trust Fund is, of course, a wholly British initiative, and the challenge is to get inter-generational rebalancing working across the world, and particularly in real hotspots of poverty. Listeners will recall that we made a proposal for incentivized learning to benefit young people in Africa on 21st August, but there are many areas where this combination of initial resources and life skills learning could really help.
At the start of this commentary, we referred to the current focus on older generations, and there’s no doubt that attitudes harden with age. On 16th October our commentary was entitled ‘unbridled revenge is not the answer’, and yet over the past two months most people would agree that is what has happened in Gaza, among whose dead are 7,000 children.
But every new generation makes their own way through life and, if their parents or grandparents cannot accept the teaching of ‘love your enemy, pray for those who persecute you’, there is always hope that the younger generation can learn afresh. In order to do this, however, they can’t be grounded in the same poverty and squalor which has already led to such resentment.
This is why inter-generational rebalancing is so important. By recognising that starter capital accounts and life skills can bring about attitudinal transformation, we will give hope and opportunity a chance to fly. It's not a recipe for subservient welfare provision — we're speaking here of individual empowerment, which is what Gordon Brown and Ruth Kelly were setting out to achieve twenty years ago.
Let's hope that governments the world over will recognise this in the years to come, and that successful delivery of the Child Trust Fund harvest here in the UK will help to encourage them in this direction.
Gavin Oldham OBE
Share Radio