Child Trust Funds and ISAs see a boost

Research by Engage Mutual has revealed that January has proved the most popular month for parents to open up a Child Trust Fund (CTF) with nearly 12% of the total figure for 2007, compared to November which saw figures halved.

A spokesperson for Engage Mutual said that January is usually a time when many people attempt to sort out their finances.

However, parents are urged to invest little and often for their child for the long term, not just at the start of the year.

Parents are also encouraged to invest in an Individual Savings Account (ISA). Kevin Mountford of moneysupermarket.com said many providers are bringing their headline-grabbing cash ISA offerings out much sooner in the year than before.

Their desire to secure more deposits is no doubt due to the problems at crisis-torn Northern Rock which highlighted the need for providers to have substantial deposits. Savers can certainly take advantage of this as the end of the tax year approaches.

Mr Mountford continued that however, savers shouldn’t be fooled by the figures, they are urged to look at the notice period and whether they allow transfers in. If you’ve been using your ISA allowance diligently for a number of years, you’re likely to have a tidy sum stashed away that you could transfer into a new, higher-paying account.

About half of the top ISAs on the market don’t allow you to transfer previous lump sums in, so savers need to read the small print Mr Mountford concluded.

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