# Capital at birth for Spain: a radical-centre proposal for every newborn's starting stake

> Spain should open an invested account with €5,000 for every child born, with larger top-ups for low-income families, locked until 18 and held by a public custodian so no account is lost. The idea comes from Halstead and Lind's The Radical Center and was tested in Britain's Child Trust Fund, whose 6.3 million accounts show both the promise and the pitfalls. At 2024's 318,005 births the cost would be about €1.6 billion a year, financed by reforming inheritance and gift taxation.

- URL: https://www.radicalcentre.eu/en/articles/capital-at-birth-spain-proposal
- Language: en
- Publisher: radical centre / centro radical
- Published: 2026-10-07
- Topic: Economy & work
- Author: radical centre
- Licence: CC BY 4.0

## Key points

- Halstead and Lind proposed a $6,000 nest egg for every child at birth in The Radical Center (2001).
- Britain's Child Trust Fund paid £2 billion into 6.3 million children's accounts from 2005; 145,000 matured accounts were unclaimed by April 2021.
- Spain paid €2,500 per birth from 2007 as a one-off benefit to parents; its core provisions were repealed from 2011.
- Our proposal: €5,000 at birth, more for low-income families, invested by a public custodian and released at 18.
- With 318,005 births in 2024 the gross cost is about €1.6 billion a year, financed through inheritance and gift tax reform.

Of all the proposals in Ted Halstead and Michael Lind's *The Radical Center* (2001), the simplest is the one that best captures the idea. Every child would receive a $6,000 nest egg at birth. The American Prospect's reviewer compared it to a twenty-first-century Homestead Act. Spain should build its own version, and it can learn from two European experiments that both ended in 2010.

## What Europe already tried

Britain ran the closest thing to Halstead and Lind's idea. The National Audit Office's 2023 investigation sets out the numbers. The government paid more than £2 billion into Child Trust Funds for 6.3 million children born between 1 September 2002 and 2 January 2011. Most children got around £250 when their account was opened; children from low-income families and children in care got an extra £250. In all, 36% of children received additional government payments. Families, friends or anyone else could add money until 18, when the account matures and the young person can withdraw it.

The scheme's stated aims included making sure that in future all children have a financial asset at the start of adult life. In 2010 the government closed it to children born after 2 January 2011.

The audit is just as useful for what went wrong. HMRC had to open 28% of the accounts itself, 1.7 million of them, because parents did not use the voucher within a year, and parents from low-income families were less likely to open one. Low-income families were also less likely to add money: in 2011-12, 11% of their children's accounts received extra payments, averaging £202, against 27% of accounts from higher-income families, averaging £342. And when the first accounts matured, many young adults never collected. By 5 April 2021, 175,000 eighteen-year-olds had withdrawn or reinvested their money and 145,000 had not, leaving £394 million unclaimed.

Spain tried something different. Ley 35/2007 created a payment of €2,500 for each child born or adopted, either as a deduction in income tax or as a one-off Social Security payment. It went to the parents at the moment of birth. The core of the law was repealed with effect from 1 January 2011 by Real Decreto-ley 8/2010, the austerity decree of May 2010.

So Europe has run both versions of the idea. The British one built an asset in the child's name and struggled with take-up and tracing. The Spanish one handed cash to parents and left nothing behind for the child. Both were cut in the same austerity year.

## The proposal

Spain should create a *dotación de capital al nacer*: a starting stake for every child, designed to fix the weaknesses the British audit found.

Every child born or adopted in Spain receives €5,000 in a personal account opened automatically when the birth is registered. Nobody has to apply, choose a provider or post a voucher. Children from families on the minimum income scheme or in care receive a larger amount, so that the progressive top-up does the work that, in Britain, family contributions did for better-off children.

The money is invested in a low-cost, diversified index fund managed under public mandate by a single custodian, with families able to add contributions on top. The account appears in the child's, and later the young adult's, digital file with the tax agency, with the balance visible at any time. At 18 the money becomes available, and at 25 any unclaimed balance is transferred automatically to the person's registered bank account. No account gets lost.

The cost is easy to estimate. INE recorded 318,005 births in Spain in 2024. At €5,000 each, the gross annual outlay is about €1.6 billion, before the extra amounts for low-income children. For comparison, the 2007 birth payment of €2,500 per child would cost about €0.8 billion at today's birth numbers.

The financing should come from reforming inheritance and gift taxation, with a common minimum across the autonomous communities. The logic is direct: wealth that passes privately from one generation to the next helps pay for a modest stake that passes publicly to every child.

## Why this is a radical-centre policy

The left's concern is that inherited wealth entrenches advantage and that children of poor families start adult life with nothing to fall back on. This proposal answers it with redistribution from large inheritances toward every child, weighted toward the poorest.

The right's concern is that cash transfers are spent and forgotten, that people should own assets and that long-term saving in markets builds independence. This proposal answers it with ownership: an invested account in the child's own name, growing over eighteen years, open to family contributions.

The idea that fits neither tradition is the one Halstead and Lind put at the heart of their book: a citizen should begin adult life with a stake, as a matter of membership in the community. The endowment is separate from income support and from the pension system. It is a different social right, concerned with the starting line.

Critics will say €5,000 is small. Invested for eighteen years it becomes a meaningful sum for a rental deposit, training or a first business, and it changes the experience of turning 18 for the young people with no family capital behind them. Others will say the money is better spent on services. Spain should do both, and a dedicated revenue source keeps the endowment from competing with schools and clinics for the same euros. The British and Spanish experiments were dropped in a fiscal crisis. A version funded by a dedicated tax reform, opened automatically and impossible to lose would be much harder to cancel the next time budgets tighten.

## FAQ

### What is a baby bond or capital endowment at birth?

It is a sum of public money placed in an invested account in a child's name at birth, which grows until adulthood and can then be used by the young person. Britain's Child Trust Fund (2005–2011) is the best-known European example.

### How much would a capital endowment at birth cost Spain?

At €5,000 per child and the 318,005 births INE recorded in 2024, the gross annual cost would be about €1.6 billion, before the extra top-ups for low-income families.

### Why did Britain's Child Trust Fund fail?

It was closed in 2010 for new births, and its design left gaps: HMRC had to open 28% of accounts because parents did not, low-income families received fewer extra deposits, and many matured accounts went unclaimed.

## Sources

- [Investigation into Child Trust Funds](https://www.nao.org.uk/wp-content/uploads/2023/03/investigation-into-child-trust-funds-summary.pdf), National Audit Office (2023)
- [Child Trust Funds](https://www.gov.uk/child-trust-funds), GOV.UK (2026)
- [Movimiento Natural de la Población 2024](https://www.ine.es/dyngs/Prensa/es/MNP2024.htm), INE (2025)
- [Ley 35/2007, deducción por nacimiento o adopción y prestación de pago único](https://www.boe.es/buscar/act.php?id=BOE-A-2007-19745), BOE (2007)
- [The Radical Center: The Future of American Politics (review)](https://prospect.org/2001/12/19/radical-center/), The American Prospect (2001)