The Children’s Mutual, leading Child Trust Fund (CTF) provider, has highlighted that according to new HM Revenue & Customs (HMRC) figures, the CTF is the most successful savings scheme in the UK. LONDON, ENGLAND, November 08, 2009 /24-7PressRelease/ — The Children’s Mutual, leading Child Trust Fund (CTF) provider, has highlighted that according to new HM Revenue & Customs (HMRC) figures, the CTF is the most successful savings scheme in the UK.
The Children’s Mutual’s analysis of the HMRC 2009 CTF report reveals that families are far more engaged with the CTF than other long-term savings products. According to the report, 74% of families proactively opened CTF accounts within a year of their child being born, yet just 40%* have a private pension and only 30% of the eligible adult population have ISAs.
Over 4.6 million children now have Child Trust Fund accounts and almost GBP2 billion has already been saved for children’s futures.
David White, Chief Executive of The Childrens Mutual, said: "The Child Trust Fund is changing the nation’s savings habits in a way that adult’s savings plans have not".
According to its customer data, October has been the strongest month ever with even more parents opening accounts. The Children’s Mutual also announced record numbers of parents setting up a direct debit from outset this year.
David White continued: "The fact that three quarters of families are opening a Child Trust Fund account within a year of their baby being born is great news particularly when you look at the take up compared to adult’s usage of ISAs or pensions.
These new figures demonstrate the widespread support of parents towards long-term savings and their commitment to doing the best for their children’s futures. Families tell us that without the CTF, they just wouldn’t be saving for their children so early on."
According to The Children’s Mutual figures, half of its CTF customers are committing to long-term savings from the very beginning of their children’s lives by starting a monthly direct debit averaging GBP24 a month. Over an 18 year period, this could produce a fund of GBP9750 into a CTF**.
David White said: "Through the CTF, in the future all 18 year olds will have the opportunity to start adult life with an asset and this should have a major impact on their lives and the wider economy."
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 GBP250 Child Trust Fund voucher (GBP500 for low income families) from the Government when their parents register for Child Benefit. The Government will make a second contribution of GBP250 (GBP500 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 GBP1,200 each year.
Notes to editors
Figures from HMRC CTF Statistics 2009 and TISA September 2009
* Family Resources Survey, Department for Work and Pensions – published Summer 2009
** Projected value based on investing GBP24 a month (plus the Government’s initial GBP250 voucher and another GBP250 at age 7) for 18 years in a stakeholder CTF account. Includes assumed investment return of 7% a year, with charges of 1.5% of the CTF account value each year. Projected values cannot be guaranteed as the value of shares goes up and down. So the final payout could be more or less.
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 which specialises in long term savings for children and is now the choice of 1 in 4 parents for their child’s Child Trust Fund, with more than 725,000 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.
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