Government should encourage poor families to save, says think tank

Its report, Asset Building for Children – Creating a New Civic Savings Platform for Young People, comes as the government phases out Child Trust Funds by next year.

Recommendations by ResPublica are to retain the infrastructure of Child Trust Funds and use them for a similar kind of savings account called Asset Building for Children.

It also wants to see a reward scheme to encourage saving among young people, such as discounts off leisure facilities.

A fund should also be set up based on donations by businesses and charities to match savings made by poor families.

Report authors ResPublica director Phillip Blon and children and family unit head Sandra Gruescu say in the report that "too many Britons are trapped in a world of welfare and low wages, where owning little, they can change even less".

They add: "And with minimal prospect of advancement for them or their children, it often appears as if we are creating and expanding a new servile class progressively and aggressively cut off from the world of assets and opportunity."

The report is backed by Professor Julian Le Grand, professor of social policy at the London School of Economics and a spokesman for the Save Child Savings Alliance.

He said: "We must not allow what has been a successful start in fostering a savings culture for all to fall away from the most vulnerable in society."