Osborne plans to cut child trust funds

The Conservatives will cut back on child trust funds (CTFs) if they win the next election.

Speaking at the party conference in Manchester today, Shadow Chancellor George Osborne says a Tory government would limit the availability of CTFs to only the poorest people.

The CTF, launched by the Government in 2002, gives families a £250 voucher when a child is born, to be invested in an approved savings vehicle until the child is 18. Returns on the investment are tax free, and poor families can qualify for an additional £250 voucher.

Osbourne says he wants to cut the availability of CTFs to just the poorest third of the population to help plug holes in the UK's finances.

He also pledges to abolish tax credits for those earning upward of £50,000 and confirms plans to lift the state pension age for men to 66 from 2016, up to 10 years earlier than planned.

Pension changes

In a bold keynote speech, he says the move would help lift Britain out of its "sea of debt".

The Conservatives have said that the change could save the public coffers £13bn a year.

Osborne also announces that a Tory government would not raise the pension age for women from 65 to 66 until 2020.

Under the government's existing plans, the state pension age will rise gradually from 65 to 68 between 2024 and 2046.

Bringing the move forward would mean many more people than previously expected, particularly those aged between 49 and 59, would have to work a year longer before qualifying for a state pension, the BBC reports.

The government's current intention is to bring the state pension age for women in line with that for men, so that it rises from 60 to 65 from 2010 to 2020.

Difficult measures

Osborne's speech is likely to be welcomed as the first time the Conservative's have spelled out how they intend to tackle the country's gaping budget deficit.

Announcing a series of difficult measures, he makes clear the scale of spending cuts that would be needed and said that the wealthy would not avoid the pain.

He says that banker bonuses could be taxed if it was found they were excessive.

But the headline-maker was the announcement to freeze public sector pay for all those on more than £18,000, except for frontline soldiers, in 2011.

This would accompany a slashing of Whitehall department budgets.