Stay Informed!

By Stephanie Halligan on 11/23/2011 @ 11:00 AM

Tags: Children's Savings Accounts, Matched Savings

In September 2002, the Labour party in the United Kingdom launched a ground-breaking initiative supporting asset building for families and children: Child Trust Funds (CTFs). Under this policy, every newborn child in the UK was entitled to a £250 savings voucher with the promise of another payout at age seven, and as of 2010, almost 5 million families had enrolled in a CTF.

From an asset-building perspective, CTFs represented the “holy grail” of public asset building policy: it meant that every child in the UK would have an asset beginning at birth. CTFs were a “rare” example of asset-based welfare policies. These accounts served as a model for the rest of the asset-building world as a policy designed and implemented by central government, offering opportunities for low-income and disadvantaged families to build assets for their children’s future. However in 2010, the Coalition government abolished this progressive program and eliminated one of the very few universal welfare policies supporting asset building for children.

In a new report titled "Asset Stripping: Child Trust Funds and the Demise of the Assets Agenda," our colleagues at the Institute for Public Policy and Research (IPPR) argue that a universal measure like CTFs could not survive without the support of a broader, governmental asset-building agenda and that this type of government policy requires wide and diverse support to withstand political change.

While we regret the decision by the coalition government in the UK to phase out this important investment in the future of children, CFED applauds the UK for its leadership in building assets for the next generation. This paper from IPPR highlights the need to engage policymakers from both sides of the isle in order to take positive steps to support asset-building legislation at the federal, state and local level.

For more information on CFED’s Asset Building for Children initiatives, please visit cfed.org/programs/abc.

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