A new policy rooted in data from a national birth cohort study went on to create savings for millions of children born between 2002 and 2011.
The Child Trust Fund scheme aimed to create a pot of savings for every child and to encourage young people to get into a habit of saving.
The rationale for the new scheme was informed by findings from a study which had been following the lives of a group of people since they were born in 1958.
The study had collected information at all different ages, including when study members were 23 and 33.
Researchers looking at the information from this study found that having even very modest savings at age 23 was linked to a range of beneficial economic, social and health effects 10 years later.
This included a reduction in the likelihood of unemployment, of being a smoker and of having experienced marital breakdown by age 33.
It also seemed that the total value of the financial assets made less of a difference than the simple fact of having them.
We were absolutely staggered by the difference that having some assets, some stake, made to individuals, not just in terms of that start in life as adults at the age of 18 but throughout life, a difference obviously in terms of security and stability, but also actually their willingness to engage with life.David Blunkett, former Education Secretary, Radio 4’s Analysis programme, “The Asset Effect”, broadcast on August 18, 2005
The findings cemented the government’s decision to proceed with the Child Trust Fund scheme that it had been working on. Although the scheme was later closed, in 2011, it left a significant legacy in the form of the millions of children’s nest eggs which started to hatch in 2020 when these children began to turn 18.