Monthly Child Trust Fund contributions pass the £17million
13 April 2010 / by Lois Avery
The amount of money being added to Child Trust Funds has risen past the £17 million for the first time.
New statistics released by the Tax Incentivised Savings Association (TISA) in their latest Child Trust Fund (CTF) quarterly survey showed that average monthly subscriptions into Child Trust Funds are now at £23.14.
Child Trust Funds were introduced by the government in 2002 and provide children from families claiming child benefit with a £250 voucher to give the child a head start with savings in adulthood. An additional payment of £250 is also paid at the age of seven and the money cannot be withdrawn until the child reaches 18, although the funds can be added to on a monthly, or occasional lump sum, basis.
The TISA quarterly survey, which ran between December 2009 and March 2010, contains data collected from Child Trust Fund providers of more than 3.5 million accounts, representing 73% of all Child Trust Funds in the UK.
As well as passing the £17m mark, this survey also showed that the number of accounts recieving regular direct debit subscriptions has grown to 739,602 – an increase of 31,560 on the previous quarter. And £13m in additional lump sum subscriptions were also added to Child Trust Funds.
Tony Vine-Lott, TISA Director General says: “I am particularly pleased that our message is getting through that money given as a gift can be put into a CTF. This survey covers the Christmas period and the large uplift in lump sum contributions is an indication that parents have saved presents of money into their child’s CTF.
“It is often overlooked that CTFs are a recognised savings product that enable friends and family to contribute to a financial nest egg that only the child will be able to access and only when they reach age 18.
“This means that CTFs benefit all children regardless of their background and this, along with the role the scheme has in improving financial literacy, should be borne in mind in any debate about the future of CTFs.”
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