As the Child Trust Fund generation celebrates its sixth birthday this week, The Children's Mutual says there is cause to celebrate as the saving habits of the UK start to change.
According to statistics, almost a third of children in the UK are now eligible for a Child Trust Fund
(CTF) account and 3.61 million CTF vouchers have been issued so far. The scheme, which began in 2005, is eligible to all children born since September 1 2002 and was introduced to help change the saving habits of Brits.
So far so good, CTF provider
, The Children's Mutual reveals, as in 2007 more than half of all new CTF accounts were actively opened, with a monthly direct debit arranged for future contributions.
Saving into the CTF account regularly is the best way to capitalise from the Government's contribution, says The Children's Mutual, whose customers pay an average of £24 a month into their Child Trust Fund accounts
And, if this was kept up throughout the life of the CTF it could give the child a lump sum of almost £10,000 upon the account maturing when the child turned 18.
Chief executive at The Children's Mutual, David White, comments: "Parents should be celebrating that by paying into a Child Trust Fund they are going to be making a real difference to their child's future and also their own – by making the decision to prepare for future financial burdens early, their parents can help to limit any potential impact on their own pocket at a time when they might be contemplating retirement or becoming mortgage free."
"The Child Trust Fund was introduced specifically to help provide young people with greater choice when they reach adulthood by providing them with a tangible, financial asset. Today's six year olds and their younger counterparts are benefitting from a national savings and investment scheme that we hope will continue to revolutionise the savings culture in the UK."
Commenting on the number of families that are making regular deposits, and making the most of their CTFs, Mr White concluded: "We are also pleased that so many parents have adopted a long term approach to CTF with nearly four in five families opting for share-based CTF accounts (either Stakeholder or Non-Stakeholder). Although the value of shares can go up and down, we are buoyed by the fact that, historically, they have outperformed cash over the long term.
"We are keen that parents understand this when making their investment decision, in order to take full advantage of the potential for their CTF contributions."
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