The Parliamentary Under-Secretary of State for Education (Tim Loughton)
In March of this year, the Chancellor of the Exchequer announced that the Government would provide support for the long-term savings of looked-after children through junior ISAs. Today, the day that junior ISAs first become available, I can announce that around 55,000 looked-after children across the UK will benefit from a new junior ISA in 2012, with an initial payment of £200 from the Government.
I am particularly grateful for the support of Barnardo’s and Action for Children, with whom we have worked closely to ensure we get the best scheme for as many vulnerable children as possible. The scheme will provide a junior ISA for every child looked-after for 12 months or more and who did not previously benefit from a child trust fund (CTF). This includes those born after the CTF scheme was stopped, as well as older children who were born before the CTF scheme was created.
I am also pleased that, as for previous support to looked-after children under CTFs, this new scheme will apply equally to looked-after children across the UK. I am grateful to the Cabinet Secretary for Education and Lifelong Learning in Scotland, the Deputy Minister for Children and Social Services in Wales and the Minister for Health, Social Services and Public Safety in Northern Ireland for their support for our work. Officials at the Department for Education will continue to work with officials in those administrations as we put the scheme into practice.
The Government want to ensure that looked-after children receive the best possible support and gain the same experience as any other young person. These savings will help them when they reach 18 and are facing difficult choices as they start out in the adult world. I am confident that, when combined with financial education, holding a real financial asset in a savings account will encourage these young people to learn about how to manage their money well.
These children are some of the most vulnerable in our society and we are committed to investing in them so they can thrive. I want these savings to be worth much more than £200 by the child’s 18th birthday and I hope individuals and organisations will also want to use these accounts to contribute and invest in the futures of these vulnerable children.
The Department for Education will shortly be launching a tender exercise to select the best partners to operate the scheme. Potential partners will need to demonstrate not just that they can make the right investment choices for looked-after children, but that they can raise additional funding from voluntary contributions. A key priority will be the ability to operate the scheme with low administrative costs. This will give generous individuals and organisations the opportunity to channel financial support directly to those who are most in need, helping looked-after children take the chances that may otherwise be denied them.