1.5m child trust funds opened

By SASCHA HUTCHINSON
Updated:

 

AROUND 72%, of the first batch of child trust fund vouchers have been invested before they expired, the Government said today.

baby

The vouchers were issued to all children who were born after August 2002, and the Government began distributing them at the beginning of 2005. They had a year to choose where they wanted to place the money.

The other 28% of first-issue vouchers that have not been invested will be placed in a default stakeholder pension with one of 13 providers who have agreed to invest the excess vouchers.

Around 1.5m CTF vouchers have so far been placed in a fund.

Chief executive of the Children's Mutual, David White, which will take an allocation of the uninvested vouchers, said: 'There is now clear evidence that the CTF is acting as catalyst for many parents to think about long-term savings for their children which is brilliant news for future generations.

'Particularly encouraging is the fact that we've seen a doubling in the number of parents saving long-term for their children, and many parents - and the wider family - are also contributing lump sums by cheque.

'The average monthly payment has increased by 50% from £15 pre-CTF to £23, which means that, allowing for an initial government voucher of £250, a child could receive a lump sum of around £9,030 when they reach 18.

'This could contribute around 23% of their university costs or nearly 37% of the deposit for a first home.'

The Government figures show that:

• 72% of the earliest vouchers issued have so far been used by parents to open a Child Trust Fund account.
• Of this earliest group (the 'transitional' group - born between 1 September 2002 and before the launch of the scheme of 6 April 2005) 1.27m accounts have been opened out a total of 1.76m vouchers issued.
• 1.48mm Child Trust Fund accounts have been opened in total.
• 2.3mm Child Trust Fund vouchers have been issued in total.

Ivan Lewis MP said he was 'delighted' that close to 1.5m vouchers had already been invested.

 

USEFUL LINKS

• NOT SURE WHERE TO INVEST? Our best CTF accounts link will help you
• WHAT'S A CTF?: Our guide to child trust funds
• GUIDES: Investing for children
• FREE SERVICE: Order CTF brochures

 

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