Successful savings – New figures show CTFs are the most widely used savings scheme
New figures out today suggest that the Child Trust Fund (CTF) is the most successful savings scheme in the UK according to leading CTF provider, The Children’s Mutual.
Its analysis of Her Majesty’s Revenue and Customs (HMRC) 2009 CTF report released today reveals that families are far more engaged with the CTF than other long-term savings products. According to the latest HMRC report, 74 per cent of families proactively opened CTF accounts within a year of their child being born, yet just 40 per cent have a private pension and only 30 per cent of the eligible adult population have ISAs.
- Over 4.6 million children now have Child Trust Fund accounts
- Almost £2 billion has already been saved for children’s futures
David White, Chief Executive of The Children’s Mutual, said: “The Child Trust Fund is changing the nation’s savings habits in a way that adult’s savings plans have not. October has been the strongest month ever for The Children’s Mutual with even more parents opening accounts with us. Also this year record numbers of parents have set up a direct debit from outset to try to build up a bigger pot of money for their children. 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 (30%) or pensions (40%).
“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. Half of our CTF customers are committing to long-term savings from the very beginning of that child’s life by starting a monthly direct debit, which could produce a fund of £9750 based on the average £24 monthly top up. 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.” HMRC CTF Statistical Report 2009
 Family Resources Survey, Department for Work and Pensions – published Summer 2009 TISA September 2009
 HMRC Quarterly Stats Sept 09
 HMRC CTF Statistical Report 2009, Forward and page 8
 This future projected value is based on investing £24 a month [plus the Government’s initial £250 Child Trust Fund voucher and another £250 at age 7 for 18 years in a stakeholder CTF account. We’re assuming an investment return of 7% a year, and charges of 1.5% of the CTF account value each year. The projected values aren’t guaranteed because the value of shares goes up and down. So the final payout could be more or less than this.