Osborne commits 5m to looked-after children's ISAs

Chancellor George Osborne has confirmed in parliament that the government will make the contribution to the ISAs, which replace the child trust fund.

Speaking at Treasury question time in the House of Commons, he said: "I know these children face particular challenges and I can tell the House the Department for Education will work with others to make the necessary funding available to ensure we can provide the support they deserve. The sum of money involved will be around £5m."

He added that further details surrounding the junior ISAs and the government’s contribution to children in care would be announced next week.

The move has been backed by children’s charities Barnardo’s and Action for Children, which have been campaigning for government contributions to the ISAs since the abolition of the child trust fund earlier this year.

Action for Children’s chief executive Dame Clare Tickell said: "Leaving care can be a frightening and isolating time and, in the absence of support from their families, this financial support will make all the difference to care leavers, helping them to stand on their own two feet as independent adults."

The charities are specifically calling for the government to deposit £250 into the accounts of any child who enters the care system for a minimum of 13 weeks.

Barnardo’s chief executive Anne Marie Carrie added: "This modest investment into savings accounts for looked-after children will help these young people achieve their goals and avoid negative outcomes such as homelessness or falling into cycles of debt."