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The report from the Institute for Public Policy Research looks at the arguments for and against CTFs, and explains why assets are an important way of providing a financial cushion for families in times of hardship.

It suggests that, if funding for the national CTF programme is cut and CTFs are restricted to the poorest one-third of families, the Welsh Assembly Government should not cut the funds allocated to the CTF Cymru. Instead, it should take the opportunity to strengthen its asset-based attack on child poverty in Wales.

The paper calls for specific measures designed to increase the number of parents opening CTFs, to ensure a high rate of uptake for CTF Cymru and to encourage more parents with low incomes to place additional funds in their children's CTFs.

Tony Dolphin, ippr's Senior Economist, said:

"Research into asset-based welfare policies clearly demonstrates that asset ownership improves family well-being. The Child Trust Fund should be seen as part of a long-term strategy to encourage and increase asset ownership in the UK.

"The Welsh Assembly Government's decision to use the CTF as part of its effort to tackle child poverty in Wales by reducing the chances of poor children becoming poor adults is welcome in this context.

"If a future UK Government decides to limit the CTF to the children of families with low incomes, the Welsh Assembly Government should, rather than cutting back its own programme, devote the freed-up resources to intensifying its programme of asset-based welfare. This should include specific measures designed to ensure maximum take-up of CTF Cymru and to encourage parents to make additional contributions to their children's CTFs."

Notes to editors:

1. Asset-Based Welfare and Child Poverty: Next steps for the Welsh Assembly, by Tony Dolphin and Dr Rajiv Prabhakar, is available at: www.ippr.org/publicationsandreports/publication.asp?id=744

2. The Welsh Assembly Government has made asset-based welfare a key part of its child poverty strategy. It established the Child Trust Fund Cymru and emphasises the provision of CTFs through credit unions and includes the opening of Child Trust Funds (CTFs) as one of its child poverty indicators.

3. The CTF Cymru provides every eligible child in Wales with an extra £50 paid into their CTF accounts, and a further £50 for those living in low income families.

4. The Liberal Democrats have proposed ending the Child Trust Fund programme. Conservative Party policy is to restrict Child Trust Funds to the poorest one-third of families.

For more information please contact Monica Evans, Interim Media Officer:
020 7470 6112 / m.evans@ippr.org