More parents taking advantage of Child Trust Funds
The Government has announced that Child Trust Fund (CTF) opening rates have increased from 70% to 72%.
Commenting on the figures, Kity Ussher, economic secretary, said that the Government remained committed to increasing this total, through publicity campaigns focusing on parents.
Ms Ussher is urging low-income families to make contributions to the CTF account, however small they might be, in order to provide their children with a head start in the future.
CTFs were introduced in 2005 and have been available to every child born after September 2002. The Government gives a £250 voucher, rising to £500 in the case of low income families, to all newborn babies.
Parents are encouraged to use the voucher set up a long-term savings or investments account which the child can access when it reaches 18.
Each year, an additional amount of up to £1,200 can be paid into the CTF account, which will be tax-free.
Furthermore, the Government has promised to make a one-off payment of £250 into all Child Trust Funds when children reach the age of 7.
There are 3 different types of Child Trust Fund accounts available including savings accounts, share or equity-based accounts or stakeholder accounts.
There are many different offers available so parents are advised to shop around to get the best deal.
A recent report by Virgin Money estimated that if £10 per month was invested into a CTF, the amount saved would grow to £5,210.
Parents that do not invest the voucher within 12 months will have it invested for them by HM Revenue and Customs.
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