Child Trust Fund Facing Changes in the UK

The fascinating election in the UK (and the surprisingly quick exchange of power) is going to be notable in the long run for more than just the theatrics that have been the focus thus far, there’s policy at stake.

Of most interest to us is the Child Trust Fund, the UK’s program of accounts at-birth for all children.We’ve written about the program extensively since it’s inception, and while we have strong opinions about how the program could be improved (or how it should be improved if implemented in the United States,) we regard the CTF as a critical real-world experiment into the promise and challenges of a national system of at-birth accounts.

During the campaign leading up to the current UK elections, the CTF became a campaign issue as the Liberal Democrats had highlighted the program as on their list for termination and Liberal Democrat leader Nick Clegg mentioning that agenda item during the UK’s unprecedented series of televised debates. Now that a new government has formed featuring a coalition of Tories and Lib-Dems, it appears that changes, though not elimination, are targeted for the CTF program.

According to articles in the British press, the CTF is going to be eliminated for middle- and upper-class Britons, while the program will remain in effect for lower income families. The Lib-Dem website released an outline of the agreement between the parties that states:

The parties agree that reductions can be made to the Child Trust Fund and tax credits for higher earners.

We’ll be watching to see what form those reductions take, but more than that we’ll be watching to see what this development means for those families that currently have accounts and for the future of the program, including the ability of academics to use the CTF as an a rich ground for conducting research into the outcomes of the program.