Child Trust Funds are the most successful savings scheme in the UK, The Children's Mutual has declared.
According to the latest Child Trust Fund (CTF) report by Her Majesty's Revenue and Customs (HMRC), families are more engaged with investing in a CTF than other long-term savings plans.
The report shows that 74 per cent of families opened a CTF within a year of their child being born – compared to 40 per cent of people who invest in a private pension, while only 30 per cent of eligible adults have money invested in a tax-efficient ISA.
In addition, the latest HMRC report has revealed that more than 4.6 million children now have a CTF account, with almost £2billion having already been saved for their futures.
Commenting, David White, chief executive of The Children's Mutual, believes these new figures demonstrate the widespread support from parents towards long-term savings plans and shows a commitment to doing "the best for their children's futures".
"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 or pensions," he said.
Mr White continued by saying that a CTF – which can be opened for children born on or after 1 September 2002 and in receipt of child benefit – could potentially provide, based on the average £24 monthly top-up from beginning of the child's life, a fund of £9750 when the child turns 18.
He added: "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."
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