With Britain's adults a trillion pounds in the red, is it possible to turn children into determined long-term savers, watching patiently as a Government gift at birth grows into a useful lump sum on the threshold of adulthood? The Chancellor, Gordon Brown, clearly reckons it is. The Child Trust Fund (CTF) was confirmed as a gift for every child born since September 1, 2002 in the 2003 Budget. In January next year, the first beneficiaries of the Government's savings plan should get CTF vouchers - worth at least £250 for all children, while babies of parents on £13,500 or less get £500. The voucher should be handed to a financial institution which will manage its growth to maturity on the child's 18th birthday. And, right from the start, parents, relatives or friends can add anything, up to a tax-free maximum of £1,200 per year to each individual fund. Some of these nest eggs could grow fast if they attract family money. Children in better-off families could have something over £22,000 when their CTF matures. But kids who have nothing added to the original voucher will get little more than £400 at 18. Cynics are already noting that the first CTF vouchers hit doormats on a date which could be uncannily close to the next General Election. They also wonder, given Mr Brown's penchant for tampering with tax breaks, whether families are paying for this latest piece of Government largesse by the Chancellor's sleight of hand. Is he slashing tax-free savings perks available to adults through Individual Savings Accounts - ISAs - to pay for this perk for babies? Anything connecting children to a savings culture must be a good thing. But can it actually work - and deliver a decent lump sum to young adults for something more lasting than a drinking binge or a round-the-world air ticket? Although CTF money can be invested in managed funds, cash accounts with banks and building societies or National Savings, few money managers have so far been enthusiastic about getting involved - largely because the Government initially sought a 1pc cap on management fees. This has now been lifted to 1.5pc - but Prudential and Legal & General have no intention of operating CTFs. Fidelity is one of the few fund managers to sound keen - if the original voucher is topped up by private gifts. Now the Government has indicated that a CTF can be held as a deposit account, banks and building societies like HBOS and Nationwide are likely to be interested. One company already promoting CTFs enthusiastically is Homeowners Friendly Society, which has collected more than 200,000 members since its launch in 1980. Says Karl Elliott, child savings strategist at Homeowners: "Nobody should criticise this idea if it gets people kicked off into the idea of saving for a child's future. The challenge is to get people to turn the £250 or £500 into something much bigger." * Further information: Homeowners Friendly Society (0800 373010 and www.betterstart.co.,uk); another leading CTF provider will be Children's Mutual, formerly the Tunbridge Wells Equitable, Friendly Society (01892 515353). | 
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