10 September 2007

The Futures market

On the week my son started school, Gordon Brown announced that Children as young as five will learn how to open a bank account and manage their money in maths lessons. They will also be taught about interest rates and investment banking as part of a Government drive to wipe out debt problems in later life.

The government was keen to point out that these children are also the first to benefit from Children's Trust Funds, set up five years ago to give a cash lump sum to each child born. Cunningly, to prevent mum and dad spending this money on gin and fags, these special savings accounts are held in trust until the child turns 18, when the whole lot becomes his by right. Mum and dad are encouraged to chip into this pot to encourage a supposed sense of fiscal responsibility, or "ownership" as it is probably described on the scheme website.

At the moment my son's spending priorities seem to be Playmobil characters and dinosaurs. By the time he is 18, based upon my recent memory of 18 year-old boys' desires, I'm not sure they will have advanced very much, so the thought of me salting away piles of hard-earned, in order that he can blow it on a gap year in Ibiza, is less than appealing.

Presumably, then, the economic lesson behind this scheme is if you wait around long enough you'll get a wad of cash for doing nothing except not dying. Like a small scale version of what he'll be facing in his 30s: waiting on his inheritance to give him a pension because all his earnings go to saving for a house he'll never be able to afford to buy.

When he's six, they'll teach him about pension schemes by secretly taking away the snack he was saving for break, and claim it was actually a school asset so not technically his.

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