CSR Press Release

NEW YORK, NEW YORK. - July 8, 2008 - The Aspen Institute's Initiative on Financial Security (Aspen IFS) and the Institute for Public Policy Research (ippr) jointly issued a report today entitled "The U.K. Child Trust Fund: A Successful Launch," highlighting early findings from a bold U.K. initiative to provide every newborn child with an investment account.

Early analysis of the Child Trust Fund (CTF) program shows:

• 75 percent of parents open an account for their children;
  
• 30 percent of accounts opened by parents receive additional contributions;
  
• Low-income families contribute a higher percentage of their income to their children’s accounts than higher-income families; and
  
• Equity investing in the private sector is popular with parents and workable for private financial institutions.

The U.K. program was implemented in 2005 and made retroactive to cover all children born after September 2002. Each child receives a certificate to open a private investment account called a Child Trust Fund (CTF). These accounts have been opened for the 3.5 million children born in the U.K. since the program’s inception, and every account is endowed with a £250 ($500) starter contribution from the government. The account aims to give children a financial springboard into adulthood at age 18, helping to pay for anything from a first home to a college education. Aspen IFS has proposed implementing a similar program in the United States.

"The early success of the Child Trust Fund is inspiring." said Lisa Mensah, Executive Director of Aspen IFS. "As a country with a persistently low personal savings rate, we in the U.S. can learn a great deal from the successes and challenges of this program."

"It's very promising to see that both parents and financial services providers are responding positively to this bold, unprecedented savings policy," said Carey Oppenheim, Co-Director of the Institute for Public Policy Research. "The Child Trust Fund shows tremendous potential for changing the culture of saving in the U.K., and we look forward to further analysis as the program continues."

The Aspen IFS-ippr report uses official data from the first few years of the CTF, together with academic research, to draw some initial conclusions about the early achievements of the program. The paper sets out some of the early findings from the UK's experience of CTFs and highlights the key challenges for other countries that may be interested in implementing a national universal children's savings program.

To view this report online, please visit www.aspenifs.org.

The Initiative on Financial Security at the Aspen Institute is the nation's leading policy program focused on cradle to grave savings policy to help more Americans save, invest and own.

The Institute for Public Policy Research is the UK's leading progressive think tank, producing cutting edge research and innovative policy ideas for a just, democratic and sustainable world.

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