British children need to be saving around £20 per month if they are to fund their own university fees according to statistics from Halifax Financial Services.
The figures come as the first junior members of the Child Trust Fund (CTF) get ready to start their first primary schools across the country in September. And those whose parents are able to pay £20 a month into their CTF should have enough to cover university tuition fees by the time they turn 18.
Head of Halifax Financial Services Paul Stanley comments:
"We're very encouraged that more than 280,000 people have opened their CTF accounts with us and overall, take-up of accounts has significantly increased. Also, we're seeing that almost 20 per cent of CTF accounts are being topped up with additional savings - parents, friends and family are contributing on average £20 a month to the CTF. The Child Trust Fund plays a vital role in encouraging parents to build up a nest egg for their child's future.”
The Child Trust Fund initiative was set up by the government following the 2003 Budget and aims to provide every child born on or after 1 September 2002 with an endowment at birth with those in low-income families receiving the largest sums. The Fund will build up over 18 years, providing young people with a stock of assets to invest in their futures. The hope is that this form of saving will help teach young people the importance of finances as well as spreading the benefits of asset ownership to all.
However, the latest figures from the Inland Revenue have revealed that many children could be missing out on potential growth of their investments as 25 per cent of Child Trust Fund vouchers issued up until June 2006 have not yet been used to open accounts.
"Many parents probably still have opening a Child Trust Fund on their 'to do' list, but we're urging them to act now and ensure their children benefit from their investment,” adds Stanley. “At 18 years of age the amount of money in the account could help their children with education, purchasing a car or a deposit on their first home.”
Find out about Child Trust Funds