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July 5, 2009

Child Trust Funds reach 4.4 million

by Gill Montia

Story link: Child Trust Funds reach 4.4 million

New figures from HM Revenue and Customs (HMRC) show that 4.4 million of Britain’s under-sevens now have a Child Trust Fund (CTF).

Trust Fund provider, The Children’s Mutual, is enthusiastic about the continuing “revolution” in children’s savings, pointing out that in 11 years’ time the first CTF savers will reach adulthood with a financial head start and hopefully a degree of financial knowledge.

Parents seem to be retaining their focus despite the recession with the firm reporting a 16% rise in the number of CTFs opened last year, compared with 2007.

In addition, parents with newborns have opened a record number of accounts in the past two months.

Currently Children’s Mutual savers are adding an average £24 a month to funds, which the firm calculates could produce a pot of around £9,750 over 18 years.

Commenting, Children’s Mutual chief executive, David White, says: “The involvement of families is very important and even grandparents, aunties, uncles and family friends can save together to top up the CTF to the maximum amount of £100 a month.”

However, not all parents are hot off the mark in even setting up the accounts.

According to consumer group Which? around 910,000 vouchers have been allowed to expire since the scheme was launched in January 2005, although in such cases the Revenue automatically opens an account on behalf of the child.

 

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