The government is being urged to invest in a scheme to ensure children in care retain savings accounts, following the government’s abolition of the child trust fund for children in the UK to save £500m.
Barnardo’s and Action for Children say the loss of child trust fund ISA savings accounts – which ceased from January and have been replaced with a voluntary ISA scheme for parents to pay into – is unfair on children in care.
They are proposing the government invests £6.6m of the £500m of savings into a new scheme to ensure looked-after children retain savings to help smooth the transition out of care.
Anne Marie Carrie, Barnardo’s chief executive, said: “The cost of running MP’s second properties in 2009-10 was £6.8m, but the affect this money can have for care leavers is huge.
“Care leavers would only be supplied with a few hundred pounds but we must remember most of these children have left the care system with nothing. That money could help fund further education, a few driving lessons or a suit for a job interview.
“The government as their corporate parent has a moral obligation to ensure that when these young people are making that huge transition from child to adult, often alone, they have as many of the same chances as any other 18-year-old as possible.”
Under the joint document, ‘On our own two feet’, the charities have proposed that any child who remains in the UK care system for more than 13 weeks should have an account opened for them by HM Revenue and Customs (HMRC) and receive an initial payment of £250.
Local authorities would be responsible for informing HMRC if the child spends more than 26 weeks of the next year in care, after which time HMRC would make a further contribution of £100. The same applies to any subsequent year the child spends in care until they leave care.
Action for Children chief executive Dame Clare Tickell says: “Leaving care can be a frightening time for young people – they are often alone and fending for themselves at the age of 18 or even younger. It adds insult to injury for children who cannot live with their parents, to then lose out on a few hundred pounds that would make a huge difference to them and help ease their lives into adulthood.”
Care leaver Louise, 19, added that such a fund would have helped her own transition out of care. “I don’t know what the future is going to be for me. It would have helped a lot to have some savings. Too many children leave the system penniless and unprepared to stand on their own two feet. The whole leaving of care needs supporting with more aftercare and financial help.”
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