Trust Funds Shouldn’t Just Be For Rich Kids

As the U.K. was recovering from the first wave of the pandemic, 18-year-olds whose schooling was disrupted and who were about to experience similar difficulties at university or in the job market received a welcome, and in some cases unexpected, gift.

In September 2020, so-called Child Trust Funds, government-financed endowments for British children established almost two decades ago by then prime minister Tony Blair, became accessible for the first cohort of recipients as they reached adulthood. The average tax-free investment account had around 1,500 pounds ($2,035) in it — hardly a life-changing amount, but still pretty handy given the economic shock wrought by Covid-19. Many weren’t even aware they had such savings, since the program ended in 2011 due to austerity cuts.

I thought of the CTF, and similar capital endowment plans such as “baby bonds” as they’re known in the U.S., when a proposal urging financial compensation for young people went viral shortly before Christmas. The idea was they should be repaid for isolating to protect older people during the pandemic.

To many, the premise of owing children money for their sacrifice is offensive. Unlike the 2008 financial crisis, which set back millennials’ employment opportunities, older generations weren’t to blame for the pandemic. Indeed, they were the ones most likely to be killed by it. Young people’s mental health took a disproportionate hit, with many losing out on socializing, travel and milestones like graduations, but they did still have time on their side. The elderly were isolated. Meanwhile, mid-life parents were busy struggling to hold down jobs and supervise home-schooling.