Children could benefit from GBP£29,300
The Child Trust Fund (CTF) Generation, could receive more than £29,300 each at 18 if their families invested Child Benefit payments into their CTF account, according to new calculations out today from The Children’s Mutual. Research from the UK’s only specialist in long-term savings for children has found that nearly a third (29 per cent) of parents currently say they are saving their offspring’s Child Benefit.
While the majority of families use Child Benefit for essentials, The Children’s Mutual is urging those who spend the money on treats for their children (22 per cent) to consider the value of saving all or part of the benefit for their child’s future.
David White, Chief Executive of The Children’s Mutual, said: “For parents who can afford it, investing Child Benefit into a Child Trust Fund account could make a sizeable difference to their child’s future. According to our calculations, £29,300 could cover a first home deposit, the cost of a wedding or make a significant contribution to higher education costs in 18 years’ time.”
For soon-to-be or new parents who are unsure of the benefits they are entitled to, The Children’s Mutual has launched The Essential Guide to Money for Parents. Available free by calling 0800 040 7262, the guide covers everything from Government benefits and Tax Credits to free NHS services. It also provides a handy step-by-step account of how to claim them. Child Benefit for the eldest child is £18.10/week for 2007/8. £18.10 x 52 weeks / 12 months = £78.43. Saving £78.43 a month over 18 years = £29,300. These projections are based on money being invested for 18 years in a stakeholder Child Trust Fund account, alongside the Government’s initial £250 voucher and another £250 voucher at age 7, with yearly growth at the FSA mid-rate of 7% and charges of 1.5% of the account’s value each year. These figures are not guaranteed, shares can go down as well as up and the eventual lump sum could be more or less than indicated.