Three quarters of parents are actively investing in their Child Trust Funds by opening the account within the first year of their child's birth, despite the current economic climate and pressure on household finances, the Treasury has said.
Almost all parents (97 per cent) are now aware of the Child Trust Fund
scheme, the data revealed, which sees every child receive a savings voucher from the Government that can be paid into a special account and added to as the parents wish, maturing on the child's 18th birthday.
There has been a small increase in the number of accounts which parents are opening in the first year, but Economic Secretary for the Treasury Ian Pearson still believes more can be done to encourage parents to take an active role in investing for their children.
Announcing the statistics on behalf of the Treasury, Mr Pearson said: "The third year of the Child Trust Fund has continued to build firmly on the success of the founding years, but we still need to do more.
"This is why I am writing today to all MPs to encourage them to further raise the profile of the Child Trust Fund in their constituencies and to direct parents towards the help available to them in opening and engaging with their children's accounts."
The Children's Mutual, a provider of children's savings plans such as Child Trust Funds, and child savings accounts
, has welcomed the progress which CTFs are making. The Children's Mutual's own research shows that those parents which actively open a CTF on behalf of their offspring are more engaged with the process of saving and planning for their child's future and are more likely to top-up their children's accounts.
"Despite difficult economic conditions starting to hit, we are delighted that the levels of accounts being actively opened has remained consistently high and the HMRC figures for the first part of 2008 show a marked increase in the number of vouchers being used to open accounts." said David White, chief executive of The Children's Mutual
"Even in these times of economic difficulty, it is encouraging to see that parents remain committed to saving for their children and view the Child Trust Fund as a crucial part of providing a more stable financial future for them. Conversations we have had with our customers show that saving for their children is often the last thing they want to cut back on when money is tight."
Mr White hopes that yesterday's decision by the Bank of England
to cut rates by 1.5 per cent will bring some relief to families finding that their household budgets are stretched, allowing them to increase the amount they invest on behalf of their children.
"The importance of getting families engaged with the process of saving - including actively opening a CTF account and adding contributions - couldn't be more crucial for the children." added Mr White. "The average monthly top-up to a Children's Mutual CTF is £24 which could mean a fund worth £9,750 at age 18 if payments remained consistent."
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