Disable children get extra Child Trust Fund - could this be spent better?

In the budget in April, the chancellor Alistair Darling announced that children with a disability will get an extra £100 per year towards their Child Trust Fund. This will be £200 per year for those children with a severe disability.

The Child Trust Fund began in 2005, and is a scheme whereby the government give parents of each new born child a £250 voucher to invest on behalf of the child. Family and friends can add an extra £1200 per year towards the fund, and an extra £250 is added by the government when a child turns seven. The child cannot touch the Child Trust Fund, until their eighteenth birthday, when they can do with it as they please. The Child Trust Fund is designed to give young adults a head start in life.

With the extra amount for disabled children, it means that an extra £2,900 would have been invested on behalf of a disabled child by the time he/she has turned eighteen. This will be £5,800 for severely disabled children. If it has been invested well it could be significantly higher by that time.

This is obviously good news for a disabled child once he/she turns eighteen. It could be questioned though, whether this is the best use of the money. Those with disabilities need extra help, but there may be better ways of helping them. A child with a disability needs more help now, and not being able to touch the money until they are eighteen will not solve that problem. Many would argue that the government are taking the easy way out by throwing money at the problem without thinking of schemes that benefit those in need.

Giving a flat rate of £100 a year for most disabled children and £200 for severely disabled may also be misusing the money. It is not focussing on methods of improving the assistance disabled children get, but just giving each individual child an equal amount (although there are two categories). Surely there are more than two levels of disability, and therefore each child should be helped on a more individual basis. There are, of course, other schemes that are used to help disabled children, but more money spent in these areas may have been a more useful option than spending it on the Child Trust Fund. The needs of the disabled are about services and facilities, and not just about pure money. These services and facilities cost money, and this is where it should be going. Once eighteen the money can be used however the beneficiary wishes, so may not be used to help them with their disability anyway.

The one advantage of this money being put towards the Child Trust Fund is that it will be worth more when it comes to the child using the money. £100 spent now is only £100, while the accumulation of all this money plus interest over many years could be significantly more.

Andrew Marshall ©

Child Trust Fund