Sefton Central Labour MP Bill Esterson says the Conservative-Liberal Democrat government is abandoning children who are leaving care after a vital funding scheme was scrapped.
The government axed the Child Trust Fund on January 1.
Bill said the fund gave a vital leg up in helping them move on from care.
So the MP has backed Barnardo's and Action for Children who have joined forces to launch the On Our own Two Feet campaign to urge the Government to urgently rethink their plans for children in care, ahead of this year's budget.
Bill Esterson, who attended the launch said: “From the January 1 this year, the government abolished the child trust fund ISA savings account (CTF) for every child in the UK. The CTF accounts matured as young people turned 18 and the loss of this nest egg was a particularly painful blow for those children in the care system.”
The Government has saved £500million pounds per year by abolishing the child trust fund ISA and have instead replaced it with a voluntary ISA scheme for parents to pay into if they wish. For the majority of children in care who have little or no contact with their parents, they are likely to receive nothing.
The two charities have put a proposal to the government today which would cost just £6.6million per year and would ensure that children in care retain their modest savings.
The joint proposal On Our Own Two Feet states:
Any child who enters local authority care in the UK and remains in care for a minimum of 13 weeks would be eligible
After 13 weeks the responsible local authority send the child’s details to HM Revenue and Customs (HMRC) who will then open an account
HMRC make an initial payment of £250
The responsible local authority notify HMRC if the child spends more than 26 weeks of the next year in care. HMRC will then make a further contribution of £100. The same applies to any subsequent year the child spends in care until they leave care
Looked after children who currently have the Child Trust Fund would also receive annual top up payments if, as above, they have spent more than 26 weeks in care
Bill added: “The Government as their corporate parent has a moral obligation to ensure that when these young people are making that huge transition from child to adult, often alone, they have as many of the same chances as any other 18 year old as possible.
"We owe it to them to make sure that they, like many of those who are not in care, have savings that help them to plan their future and stand on their own two feet as adults."