Investments: Child trust funds growing
Child Trust Fund top-ups average £21 a month
Monday, 07 Apr 2008 17:09
Parents are topping up their offspring's Child Trust Funds (CTFs) by an average of £21.64 a month.
The quarterly survey by the investment trade body TISA shows 2.14 million CTFs have been opened in total since the scheme's launch in 2005.
In the last three months 134,000 CTFs were opened, with 480,000 were started since March 2007.
Average direct debit payments – made by a quarter of parents - in the last quarter rose by 21p, despite fears of an economic slowdown, to £21.64.
Lump sum contributions rose 4.9 per cent to £472.
Tony Vine Lott, Tax Incentivised Savings Association (Tisa) director general, said: "We have found parents continue to recognise that CTFs represent an, easy way to save for their children’s future. More parents are now increasing both lump sum and regular contributions.
"With the average direct debit contribution of £21.64 per calendar month, nearly a half million parents are following the government’s example and contributing over £250 per year to their children’s future."
Despite fears that eventually handing an 18-year-old thousands of pounds when their funds mature would be a recipe for disaster, a report for The Children’s Mutual suggests teens are more savvy than given credit for.
If given £20,000 57 per cent of 18-year-olds would save it, while the next most popular options were paying for education or a deposit for a first home.
Parents meanwhile assumed their offspring would buy material goods or have a good time.