Parents persist in saving
New figures demonstrate parents’ engagement with Child Trust Funds
New figures out today from HM Revenue and Customs (HMRC) show that nearly three quarters of all Child Trust Funds (CTFs) are proactively opened within a year of a child’s birth. However, according to a new analysis from The Children’s Mutual, this figure only tells part of the story of parents’ engagement with saving for their children.
The award winning Child Trust Fund provider found that while the vast majority of parents open an account for their child rather than waiting for the Government to do so, for those who don’t some are making a proactive decision not to while others are understandably busy with their new baby.
David White, Chief Executive of The Children’s Mutual, said: “Because the CTF is universal, every single eligible child receives an account, but what is impressive is that nearly 75 per cent of parents choose to proactively open the account and around half of our customers start saving on a monthly basis immediately.”
According to its research among parents of young children, over one in 10 parents actively choose not to open an account and to let the Government do so on their behalf, citing their lack of familiarity with financial matters. In addition, research among parents who haven’t opened accounts found that 27 per cent say it is because they haven’t had time to think about it – not surprising considering a new baby has a profound effect on family life.
Mr White said: “Attention is often paid to the quarter of parents who do not open accounts, accusing them of not engaging with, or being interested in the CTF, but our research shows that parents are far more engaged than many would believe. We found that over one in 10 parents with CTF vouchers to place, said they would choose to let the Government open their child’s CTF and of those who haven’t opened accounts, the number one reason is because they are understandably focusing on the here-and-now. The beauty of the CTF is that it allows for this, with the Government opening accounts on behalf of parents if they don’t do it themselves, meaning that no child will miss out.
“Engaging 85 per cent of the population to do anything is phenomenal when you consider that when it comes to matters financial just 40 per cent of the adult population has a private pension and only 30 per cent of those eligible have an ISA. The Child Trust Fund has done what no other savings product has done before – captured the imagination of the general population – and parents should be praised not chastised for acting in the interests of their children and recognising the importance of saving over the long term particularly at such a busy time in family life.”
 Parents have a year from approval of the payment of Child Benefit to open a CTF account, otherwise the Government automatically opens the account with a registered authorised provider.
 HMRC quarterly stats Dec 09.
 TCM internal data.
 The Children’s Mutual monthly brand tracker research, 1333 respondents.
 TCM State of the Nations research with 983 respondents. Not enough time was the primary reason.
 75 per cent of parents opening accounts (HMRC quarterly report) and over 10 per cent actively opt for the Government to open the account on their behalf (from The Children’s Mutual State of the Nation and also monthly brand tracker research, 1333 respondents).
 Family Resources Survey, Department for Work and Pensions – published May 2009.
 TISA April 2009 http://www.tisa.uk.com/statistics.html?stat_type=isa_pep.