Child Trust Funds
Between 2006 and 2010 The Share Foundation was the only charitable contributor to the Child Trust Funds of children in care without anyone in a position of parental responsibility. We made quarterly contributions through the Official Solicitor (who provides the Recognised Contact role for Child Trust Funds) on behalf of Looked After children from a growing number of local authorities. The table below sets out a summary of what was achieved:
| y/e 31 March | 2006 | 2007 | 2008 | 2009 | 2012 | Total |
|---|---|---|---|---|---|---|
| Value of CTF contributions | £6,300 | £41,700 | £102,000 | £102,700 | £103,500 | £356,200 |
| Number of CTF contributions | 84 | 577 | 1360 | 1709 | 1380 | 5110 |
| Number of children supported | 84 | 198 | 421 | 414 | 398 | 779* |
| Number of local authorities | 3 | 12 | 27 | 30 | 30 | 30 |
| Financial education | - | - | £5,400 | £3,500 | £59,500 | £68,400 |
* This is the total number of individual children who have received contributions from 2006 to 2010.
Why did The Share Foundation's work start with The Child Trust Fund?
The inspiration behind The Share Foundation was a 'popular inheritance' concept first developed by Gavin Oldham in the late 1980s. This was based on the idea that rather than absorb inheritance tax into general government expenditure, a redistribution of those inheritance levies to young people reaching adulthood would give improved opportunities to fulfilling their potential, whatever their background.
After this proposal had been taken to both Conservative and Labour administrations in the late 1980s and late 1990s respectively, the Labour Government established its Child Trust Fund policy in 2000. Although less egalitarian than 'popular inheritance' since it relied principally on family's and friends' contributions to a child's account to build up a significant fund, the scheme included contributions from the State for Looked After children which could have accumulated to £2,800 over 18 years, allowing for 6% pa growth. In contrast a child from a wealthy family benefiting from the full allowance each year could accumulate a total of £22,100 over 18 years.
Nevertheless the Child Trust Fund did identify those most in need – children in care without anyone in a position of parental responsibility – by arranging that the Official Solicitor should be the registered contact and administrator of their accounts. There are over 8,500 accounts administered in this way, on behalf of children aged between 5 and 13.
Since there was no government support for hypothecating inheritance levies on behalf of children from poorer backgrounds, The Share Foundation was established in order to channel private sector contributions for the benefit of these children, and was registered as a charity in February 2005. The Official Solicitor kindly agreed to act as a conduit for these contributions by allocating the funds to individual children's accounts on a quarterly basis. We selected specific local authorities whose children we supported, since our resources
did not enable us to contribute to all such children.
The Child Trust Fund scheme therefore gave us over the period 2005 -2010 the opportunity to put into practice the concept of providing an inheritance for children most in need.
After the change of Government in 2010 The Share Foundation made a proposal to HM Treasury to take on the Recognised Contact role. As a result of combining oversight of the two schemes in the 2016 re-tender of the Junior ISA scheme (in which The Share Foundation's continuing appointment was confirmed), this has been agreed. The transfer of Child Trust Fund administration will therefore take place starting on 2nd October 2017.
The inclusion of Child Trust Fund oversight alongside the Junior ISA scheme will enable young people in care born between January 2002 and August 2011 to benefit from our financial education arrangements such as the Stepladder of Achievement and from additional voluntary contributions, and will reduce confusion between the two schemes.