CTF withdrawal causes 'debt disease'

The government has been criticised for preventing new parents from taking out tax-free Child Trust Funds (CTF), with them being accused of "incubating the debt disease".

David White, the outgoing chief executive of Children's Mutual, launched the broadside at politicians, implying that the decision will cause many to seek debt solutions.

He remarks that "it's madness to have children leaving full-time education laden with £25,000 of debts" – levels which could make them eligible for an IVA, if they struggle to pay off what they owe over the years to come.

CTFs were launched by Labour in 2005 in order to help parents save for their children's futures.

New parents were given a minimum of £250 tax-free to get them started on their way.

However, one of the first acts of the coalition was to scrap CTFs, as they sought to decrease the nation's debt levels.

Debt problems – payday loans

15/03/2011

Once again British consumers struggling against debt problems have been told to avoid resorting to t ...

Debt problems: Interest rate threat

14/03/2011

An increase in interest rates could plunge hundreds of thousands of households into debt problems. < ...

Debt problems: borrow to pay debts?

08/03/2011

People thinking about borrowing money in a bid to alleviate their debt problems have been told only ...

Debt problems – pay off debt

07/03/2011

People with debt problems currently considering the best ways to deal with them, might be interested ...