Financial Secretary to the Treasury, Mark Hoban, made the announcement today, describing the accounts as "junior ISAs" that will offer parents a tax-free way to save for their child’s future.
The government revealed it was investigating the possibility of tax-free accounts last year after criticism greeted the Treasury’s decision in May to stop all payments to Child Trust Funds from January 2011.
Hoban said: "I am committed to ensuring that all parents can save for their children’s future in a simple and straightforward account. The introduction of this new account means we can still offer people a clear way of saving for their children, while saving the half billion pounds a year that we currently spend on Child Trust Funds."
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