Government-backed child savings accounts could be making a comeback, after a consultation was launched on a replacement for the scrapped Child Trust Fund.

Head of savings and investments at Family Investments, Kate Moore, said she welcomed the fact the government was listening to the concerns and needs of families by conducting a consultation on a potential replacement to the Child Trust Fund.

The Child Trust Fund was a scheme launched by the previous Labour government to encourage parents to save by providing vouchers to put towards savings schemes.

The Liberal Democrat/Conservative coalition government scrapped the scheme in a round of money saving measures announced earlier this year.

Kate Moore said: “Any steps towards continuing the great work that the CTF has begun is a very positive move, however, what is needed now is a real and strong commitment to safeguard the future of children’s savings.”

She said regardless of the consultation the existing CTF scheme would be entirely closed by January 2011, and if a replacement was not developed in the near future thousands of children would grow up without any savings or financial grounding.

A replacement product might be tax-free but it is unlikely it would include a government contribution to savings, as the coalition seeks to reduce the public deficit.

© Fair Investment Company Ltd