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Trust me, I'm almost one

Posted by Jack Stilgoe at 10:22am on Tuesday, 15th January 2008
We in wonkworld are always ready to give credit where it is due. In 2003, the IPPR trumpeted Gordon Brown's adoption of their nice asset-based welfare idea in the form of the Child Trust Fund. A week ago,  my 11-month old son received a letter updating him on the progress of his fund. I clarified some things for him, such as why the database appeared to know his name but not his gender. But I couldn't tell him how the 250 quid invested on his behalf by the government had mushroomed into 245 quid. At this rate - and yes, I am aware that past performance is no indicator of future performance, so things might get worse - he will come of age with 160 pounds, which he can spend on a veggieburger at Second Life Glastonbury.

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Presumably they do that thing that pension funds do, where they try and kick-start it in the early years by putting into high-risk areas of the stock market, then gradually reduce the risk as he nears 18 (in time to go on a clubbing holiday to the tropical island of Birmingham). But it is very bad policy-making if they don't properly inform you about this. Many companies flog ISAs and pensions, while cynically down-playing the difference between saving your money in a bank and putting it into, equities. People end up thinking they can get high returns at no extra risk, and end up paying the price.
Posted by Will Davies  at 1:00pm on Tuesday, 15th January 2008

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