The Children's Mutual Reports CTFs Have Revolutionised Child Savings
Released
on: February 11, 2010, 3:33 am
Author:
The Children's Mutual
Industry: Financial
The Children's Mutual, a leading Child Trust Fund provider,
has revealed new research that, five years on from the first CTF
vouchers being issued, the introduction of the CTF has revolutionised
long-term savings for children.
With every eligible child born since 1 September 2002 having a CTF account,
2010 will see more than five million children holding CTFs.
The Children's Mutual has revealed that around half of their CTF customers set up a
monthly direct debit on the day they open their child's account. If you look at
wider industry statistics, 31% of CTFs receive some form of additional saving.
Before the Child Trust Fund was introduced, just one in five families were saving
over the long-term for their children.
In addition, while nearly three quarters of parents choose to proactively open their
child's CTF account, a survey by the awards winning Child Trust Fund provider found
that when asked over one in 10 parents with CTF vouchers were opting to let the
government open the account for them - making an engagement rate of 85%. Compared to
engagement rates of other savings products - 40% of the
adult population has a private pension and 30% have an ISA - the CTF has driven the
UK adult population to engage.
The Children's Mutual also found that currently 1.4m parents, family and friends
are contributing to their children's accounts with in excess of £22m being added
every month - money set to help towards the cost of higher education, first homes
and beyond. As a result they estimate £2.74 billion will be available to young
adults each year as they turn 18.
According to its calculations, 50% of the government CTF investment so far is going
to 1.5 million families on the lowest incomes (under £15,000), with families in the
lowest income bracket saving a higher proportion of their household income for their
children than those in more affluent groupings.
David White, chief executive of The Children’s Mutual, said: "To those of us involved with the
CTF, five years has gone by in the blink of an eye. And yet in that short amount of
time, the results have been startling - the CTF has done what no other savings
account has achieved before - getting the mass UK population engaged and saving.
We're delighted that parents have engaged with the first universal savings scheme,
realising that the only realistic way to fund their adult children's futures is to
start saving now."
Child Trust Funds are designed to provide a tax efficient, long term savings vehicle
for all eligible children. Each eligible newborn child (born on or after 1 September
2002) receives a £250 Child Trust Fund voucher (£500 for low income families) from
the government when their parents register for Child Benefit. The government will
make a second contribution of £250 (£500 for low income families) when the child
reaches seven and is considering a third in the child's teenage years. Parents,
family and friends can all then add to this account up to a maximum value of £1,200
each year.
Please view our footnotes.
- Ends -
About The Children's Mutual - Home of the Child Trust Fund
The Children's Mutual's mission is to help parents, grandparents, family and
friends fulfil their hopes for today's children. The Children's Mutual is the only
UK company that specialises in long term savings for children and is now the choice
of one in four parents for their child's Child Trust Fund, with more than
750,000 accounts. This expertise has led several financial institutions and
family-focused high street retailers to choose The Children's Mutual as their
stakeholder Child Trust Fund provider.
The Children's Mutual PR contact:
Katie Donlan
Consolidated PR
22 Endell Street
London
WC2H 9AD
020 7781 2376
www.thechildrensmutual.co.uk
2022
