The Child Trust Fund (CTF) is a government sponsored scheme that allows every child born after 1st September 2002 to receive £250 (or double that if the family is on a low income). Parents will also receive an additional £250 when the child turns seven.
Once the CTF voucher has been issued, parents have a year to open the account, and invest either as cash or shares. Parents, friends and family can add an additional £1,200 per year completely tax-free, and maturing on the child's 18th birthday.
Latest figures from the Treasury show a small increase in the last quarter from 72% to 73% in the number of accounts being opened by parents in the first year. A figure welcomed by www.MyEggNest.com , the UK’s largest independent children’s saving website.
“We are delighted with these figures. This clearly shows that even in this difficult economic climate, parents are still making the effort to invest in their children’s future,” says Joe Luong, director of MyEggNest.com. “Babies born in 2009 will receive £145 less than their predecessor born in September 2002 due to inflation. We strongly urge the government to consider index-linking the £250 Child Trust Fund vouchers so that every child has a fair and equal starting point to save for their future.”
Family Investments, one of the main providers of children's savings plans such as Child Trust Funds has also welcomed the latest figures from the Treasury. However, Kate Baker, head of savings and investments is concerned with the low take-up amongst low income families.
"The fundamental problem is that the scheme is too complex to educate the less financially engaged, or to motivate the apathetic. Family Investments believes the scheme should be simplified and incentivise early uptake of the CTF, through a gift or bonus."
Steve Weisner of Independent Financial Advisers Radcliffe & Newlands commented: "No child should miss out on their CTF entitlement and we're pleased to see take up levels rising. However, given that take up levels are lowest amongst those who are least well off, we are calling for the
Government to run an awareness campaign to highlight this issue."
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Press Contact: MyEggNest Press Contact: PJP email@example.com t: 0870 7708826
Family Investment Contact: Kate Baker KBaker@Family.co.uk t: 01273 725272
Radcliffe and Newlands Contact: Christian Lennon CLennon@rad-new.com t: 0845 0217000
1 HM Revenue and Customs figures as at 16th January 2009
2 Taking the average Consumer Price Index in the period 2003 to 30 June 2008 inclusive of 2.37%
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