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Low income families unaware of handouts

Low income families unaware of handouts

Category: Money

Updated: 13/03/2009
First Published: 12/03/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Low income families are being urged to give their children a financially sound start in life by taking advantage of free government handouts.

Although the UK has one of the highest levels of income inequality in the developed world, more than half of the country's low income parents are unaware of Child Trust Funds CTF), according to Engage Mutual.

The scheme entitles children born on or after 1 September 2002 to a £250 voucher (£500 for low income families) followed by the same sum on the child's seventh birthday.

Accounts are automatically opened by the Government if parents fail to open one within 12 months of receiving the voucher. More than one in four CTF accounts are opened in this way, meaning the full potential to grow the savings pot with regular or one off contributions up to the age of 18 will not be realised.

"The lack of awareness is a lost opportunity for low income children," said spokesperson Karl Elliot. "With income inequality still a major issue and tough times for the foreseeable future, it is important that we raise awareness of the tax-free cash handouts so that the next generation does not miss out."

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