Children who have been looked-after for more than one year are to be given individual savings accounts, each with an initial payment of £200, the Department for Education announced today.
The scheme, worth £16.7m until 2015, was first announced by the chancellor this year and will offer looked-after children junior individual savings accounts that can be held in cash or shares and will mature. The first accounts, which holders can access when they turn 18, will be opened next year.
The government will open the accounts with an initial £200 payment and it is then hoped that interested individuals and organisations will contribute further payments. It estimated that around 55,000 looked-after children across the UK will benefit from the scheme.
Children’s minister Tim Loughton said: “Like any parent, the government wants to provide the best support to children in its care and make sure they gain the same experience as any other young person.
“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.”
He added: “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.”
Dame Clare Tickell, chief executive of Action for Children and Barnardo’s chief Anne Marie Carrie said the charities had long been campaigning for the move. Tickell said: “It is a small amount that will make a big difference to those children who have often had a very difficult and troubled start in life.”
Carrie added: “The boost this money will give care leavers cannot be underestimated.”
Lee, a 21-year-old care leaver, described his experiences leaving care as “daunting”. “Just having a bit of financial support would have made a real difference. It would have helped me to stand on my own two feet, made me feel safer and less stressed.”
Later this year, the Department for Education will launch a competition to select the best partners to operate the scheme.
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