Nearly three quarters of parents are still opening Child Trust Funds and investing in their children's futures, despite the current economic climate, according to new figures from HM Revenue and Customs (HMRC).
"It's very encouraging that, with the time pressures and economic worries faced by many families, parents are still engaged with the Child Trust Fund
," said David White, chief executive of Child Trust Fund provider The Children's Mutual.
"Nearly 4.2 million children - that's nearly one third of young people under 18 years of age - now have a Child Trust Fund."
He added that in the current times, with university fees threatening to rise, and average mortgage deposits in the tens of thousands, parents are recognising that it is more important than ever to get their children off to a good start financially.
"The CTF is well placed to assist families in planning their children's financial futures," Mr White continued, especially at these difficult times as it allows any family member or friend to contribute. We know from our own customers, that many CTFs are topped up by the wider family as well as parents. The Children's Mutual Child Trust Funds
has calculated that if parents and both sets of grandparents contribute £20 to a child's CTF each month, the child would have a pot of almost £22,700 by the time they turn 18.
Figures from Friendly Societies reflect the HMRC's new findings, reporting that it opened a further 300,000 Child Trust Funds in 2008.
Martin Shaw, general secretary of the Association of Friendly Societies, said that "even at a time when the level of savings is generally very low, 40% of parents or guardians or grandparents who open a CTF have topped it up, and by an average of nearly £280. It is clear that they see the account as a great way to build up a nest egg for their children."
The HMRC figures come just before the Government is expected to announce new rules for the Child Trust Fund, which will allow parents to open an account online or over the phone, without having to send the voucher to the provider.
"Parents will no longer have the burden of posting a voucher and will instead be able to open their account in one simple step over the telephone or via the internet," said Kate Baker, head of savings and investments at Family Investments, commenting on the new rules. Compare Child Trust Funds »
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