CTFs found to encourage regular savings

Child Trust Funds encourage parents to save regularly for their children, the Children's Mutual has said.

13:22 31 August 2005

Child Trust Funds encourage parents to save regularly for their children, the Children's Mutual has said.

There has been a 50 per cent increase in the number of new parents saving for children since the launch of the government's Child Trust Fund savings scheme, new data suggests.

The Children's Mutual found that the average amount of monthly top ups from parents to child savings accounts has increased from 15 before the scheme was created to 24, an increase of 60 per cent.

The UK's only provider specialising exclusively in long-term savings for children said that the latest accounts data from HM Revenue & Customs demonstrated the beginnings of a change in savings behaviour because of the Child Trust Fund.

Children's Mutual chief executive David White said more than 75 per cent of CTF accounts opened to date were stakeholder and other equities based accounts and pointed out that, historically, share-based accounts had outperformed cash.

He urged the one million parents who had not placed their voucher to do so as quickly as possible, adding: "As the annual allowance for topping up runs from the child's birthday rather than the financial year, it is important that the parents of children whose birthdays fall in the summer months start to invest now."