Recommendation 4

The objectives of the Child Trust Fund policy have not been achieved, but there is still time for HMRC to act. After establishing the scheme, HMRC showed little interest in achieving the wider objectives planned from government’s £2 billion investment. It regards the Child Trust Fund policy as having ended in 2011 when the new government closed the scheme to new entrants, despite the scheme being very much live and most accounts yet to mature. Its focus has been on raising awareness of Child Trust Funds and not on the other policy objectives. Disappointingly, the scheme has not been used to support young people’s financial education and improve financial literacy. The Share Foundation believes that only about 25% of students leave school saying that they have been adequately prepared in financial awareness. The duty to implement the policy was not fully HMRC’s but it did not establish the partnerships with other departments and organisations needed to implement and achieve the policy’s objectives. HM Treasury has not given HMRC dedicated funding for the scheme, nor supported it to do more with Child Trust Child Trust Funds 7 Funds. We are concerned that Child Trust Funds will become another example of a legacy financial product that is not given the necessary attention by government to succeed against its aims over the long term. Recommendation 4: HMRC should: a) act immediately to ensure that the most is made from the Child Trust Fund scheme. In its Treasury Minute response, it should set out how it will work with other government departments, including DfE, the MoJ and HMT, and other organisations to plan and implement activity which addresses all four of the Child Trust Fund policy’s objectives. b) make an assessment of whether similar issues are likely to affect other tax- free savings accounts the government is currently planning, promoting, and/or making contributions towards, such as lifetime ISAs and Junior ISAs for children in care. The government should wo