Response to Stamp Duty
The Children’s Mutual Welcomes Government Assistance for Housing Market but stresses need for long term savings
The UK’s leading specialist Child Trust Fund provider, The Children’s Mutual, has welcomed today’s Government proposals to reinvigorate the housing market. However, The Children’s Mutual emphasises the need to also focus on long-term savings to help provide today’s children with the necessary finances in the future to address a repeated stagnation.
David White, Chief Executive of The Children’s Mutual said: “Giving assistance to house purchasers – and particularly first time buyers – in challenging economic times is a positive thing. But the time limit on these measures highlights that they are a short-term solution and should not distract us from the longer term solution of saving.
Our research, even before the credit crunch, revealed that almost half of all parents questioned (48 per cent) already expected to bank roll their child’s first home. In support of this, 40 per cent of today’s teens believe that buying a home in the future will be impossible without their parents stumping up the deposit. The sums of money needed to give future children a boost into adult life will require careful planning.
Parents of younger children could potentially benefit enormously from learning the lessons of the present and should ideally start preparing for their children’s futures now. By placing a regular amount into a Child Trust Fund parents and wider family and friends can help to provide them with a tangible asset as they enter adulthood. The money that will be released at age 18 could be put towards further training or education and so limit any resultant debt. Or it could be further invested towards a house deposit when the time comes.”
Had the parents of today’s 18 year olds had access to a Child Trust Fund account and regularly added the current monthly average of £24 for 18 years, their children could each now be receiving £9,980 as the fund matures. Had such an account been topped up with the maximum allowed of £100 a month it could have produced £37,770 upon maturity with neither parent nor child paying tax on income and gains earned in the account. Trust Fund Generation Report
 Trust Fund Generation Report
 Assumes an initial £250 investment in August 1990 (and a second £250 at age 7) with monthly addition of £24 for 18 years into a tax-exempt account with charges of 1.5% of the account’s value each year.
 Assumes an initial £250 investment in August 1990 (and a second £250 at age 7) with monthly addition of £100 for 18 years into a tax-exempt account with charges of 1.5% of the account’s value each year.