Saving for Children Crucial
The Children’s Mutual is today reassuring the five million families whose children hold Child Trust Fund (CTF) accounts that they will be able to continue saving for their children into CTFs and it is urging them to make the most of the tax-free investment growth of the scheme.
David White, Chief Executive of The Children’s Mutual, said: “The CTF has changed the nation’s savings habits and we congratulate families across the UK for recognising the critical importance of saving for their children’s futures. Today’s parents are paying out an average of £30,000 to fund their children between the ages of 18 to 30 and these costs are only expected to rise for families of tomorrow. We urge families to not be disheartened by the Government’s announcement but to continue to help their children fulfil their future potential by saving regularly over the long term. CTF holding children now hold a unique asset that others will not.
“We are staggered by George Osborne’s announcement today. The Child Trust Fund is the single most successful savings policy to date and this sort of short term cut does not address the pressing need for families to save or recognise the significant benefit to society that the CTF will bring from 2020 as maturing funds return an anticipated £2.96bn each year to the economy. There is still time to reverse this decision so we will be talking to every MP across the country to help protect the CTF for future generations. Parents must be given the best possible vehicles to save for their children – without the CTF what alternatives do they have?
“We also reassure our current and existing customers that having been in existence for the last 129 years, we have been providing long-term savings accounts for children and helping support families throughout our history. We are committed to continuing to do so in the future.” 72 Point Cost of Children Research – Jan 2010 – Question 12
 This projection is calculated on the following assumptions based on figures from TISA Sept 2009 and HMRC 2009 Statistical report:.
1) 67% of CTFs receive £250 voucher at 0 and age 7
2) 33% of CTF receive extra £250 at 0 and 7
3) 21.5% of CTFs receive an average direct debit of £22.59 from birth
4) 9.3% of CTFs receive a lump sum of £300 in the first year + £80 for every subsequent year.