The number of people regularly paying into a Child Trust Fund is increasing, with a total of £12.6million now being paid in every month, the Tax Incentivised Savings Association (TISA) has found.
In the last quarter of 2008 up to December 15, monthly direct debit contributions into Child Trust Funds
increased to an average of £22.10, compared to £21.99 in the previous quarter, the tenth successive increase since the TISA started monitoring the data in 2006.
While the average amount paid into CTFs grew only marginally, there was a more significant increase in the number of people setting up regular payments by direct debit, which rose by 22,549.
The number of Child Trust Funds to receive a lump sum deposit also rose, up from 166,021 in the previous quarter to 195,356, but the fourth quarter average lump sum average fell from £471 to £508.
"CTFs continue to buck the savings trend as parents invest in their children's future and I am particularly encouraged by the increase in the amount of regular savings." said Tony Vine-Lott, TISA
director general, commenting on the survey's findings.
"Even at the current average direct debit subscription level the CTF should amass in excess of £5,000 after 18 years. This will be a tremendous boost to a young person beginning their adult life.
While he is encouraged by the increase in subscriptions, Mr Vine-Lott added that there is still scope to increase the number of contributions made to bring them up to the maximum level which can be invested, which is £1,200 a year.
He also reminds people that it is not just parents of children who can invest in their financial future, but grandparents, other relatives and friends of the family can also make a valuable contribution, either regularly or with lump sums.
Deposits rise considerably over the Christmas period, Mr Vine-Lott said, which will be reflected in the TISA's next quarterly report.
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