‘By putting easy access to Trump Accounts directly in the hands of parents and young Americans, we are helping to ensure that America's youth are included in this new era of economic participation.’

U.S. Treasury Department

The landmark 250th anniversary of U.S. independence will be celebrated next weekend. You might think that Donald Trump would seek to instil his legacy into the minds of the youngest generation of Americans, and he is doing just that with the public announcement of Trump Accounts on 4th July.

From my perspective as a strong supporter of inter-generational rebalancing, it is great to see this initiative which bears a strong resemblance to the Child Trust Fund scheme introduced by the previous Labour Government. We would have liked to see at least two of the lessons learned from the British experience:

  • There should be a process of automatic (rather than parent-driven) opening, and maturity release at age 21, for young people from disadvantaged backgrounds; and
  • There should be a programme of incentivised learning for these disadvantaged young people so that they can learn life skills as they earn more money for their accounts, thereby transforming their prospects of being able to achieve their potential as adults. 

Nevertheless, this is one of the more promising initiatives of the Trump administration. Will the new Government in London follow the American example and introduce a Child Trust Fund Mark 2 here? Time will tell. 

The Share Alliance/Cambridge inter-generational rebalancing conference in May certainly put the marker down for a starter capital account for disadvantaged young people in the United Kingdom; Professor Sir Julian Le Grand set out the logic clearly in his presentation. Hopefully Andy Burnham will show a bit more interest in asset-based egalitarianism than the Starmer/Reeves administration has done.

Let's have a closer look at the new Trump Account structure, as reported recently by Business Insider:

Who is eligible?

Parents can open a Trump Account for any child under 18 with a valid Social Security number. Only babies born between January 1, 2025, and December 31, 2028, will receive a $1,000 contribution from the government.

Dell Technologies founder Michael Dell and his wife, Susan, announced that they would fund an additional $250 to the accounts for children under 10 in areas with a median household income under $150,000.

How does it work?

The US Treasury will automatically make a one-time $1,000 deposit into each eligible child's account upon opening. Parents, friends, or employers can then add up to $5,000 per child each year to the account starting on 4th July 2026. Families with multiple children can open multiple accounts. Visa has also announced it will allow credit card holders to add rewards into their child's account.

The money can be invested in any diversified portfolio of low-cost index funds, such as those that track the S&P 500. Account holders will be able to see the live account balance and stock performance through an app. Teenagers and young adults can contribute their own income once they start earning money. Having a Trump Account doesn't restrict them from saving in other accounts. 

How and when can I use the money?

Trump Accounts will be locked from withdrawal until the calendar year a child turns 18, at which point the funds will be transferred to their control. Account holders can choose to use the money toward a down payment, college tuition, a new business, or other major purchases. Account holders don't have to withdraw the money at 18. They can continue to add money and treat it like a typical investment account into adulthood.

How will the account be taxed?

Trump Accounts will offer tax advantages similar to those of the American IRA (Independent Retirement Account). The $1,000 government-funded seed money won't be taxed as family income, and any parent contributions will be tax-deferred. These contributions must be made with after-tax dollars. Account holders won't owe taxes on investment earnings while they remain in the account, but the money will be taxed at ordinary income rates upon withdrawal.

Can businesses contribute to Trump Accounts for their employees?

If you're a business owner, you can contribute up to $2,500 annually to Trump Accounts on behalf of your employees' children. These deposits are tax-deductible and count toward the $5,000 annual contribution limit for the account. JPMorgan and Bank of America have already pledged to match $1,000 contributions to their employees' Trump Accounts.

You can see that, apart from Michael Dell's major initiative for children under 10 in areas with a median household income under $150,000, there's not much focus on the most disadvantaged.

The Share Foundation’s plan for a UK Child Trust Fund Mark 2 and Share Alliance’s proposal for a global programme of inter-generational rebalancing are much more targeted on breaking the cycle of deprivation. These proposals are therefore significantly more appealing to philanthropists, in the same way that Michael Dell has demonstrated.

The Share Foundation is hosting a major parliamentary event on 15th July at the Attlee Suite in Portcullis House, Westminster. Its main focus is to push hard for an automatic release process for HMRC-allocated Child Trust Funds, which will hopefully receive a more welcoming reception from the incoming administration: as the invitation states, ‘If you could provide 150,000 low-income young people across the UK with over £400 million at no cost to Government, would you take action?’

However, it will also give The Share Foundation the opportunity to press hard for the introduction of their CTF Mark 2 plan, a proposal for which was submitted to Starmer's Government in January 2025.

Asset-based administration is the way forward for a world of individual freedom with opportunity for all. Trump clearly realises this, although his plan doesn't provide for as much rebalancing as we would like to see. However, the fact that he is linking his Trump Accounts directly to America's 4th July celebrations gives us the opportunity to call for a global Independence Day for all.

As we continue to move Share Radio to support the inter-generational rebalancing work of both The Share Foundation and Share Alliance, we look forward to setting out plans for this transformation in more detail over the months ahead.

Gavin Oldham OBE

Share Radio