By offering the option to make regular Direct Debit contributions from just £5 per month, Engage believes that it is helping many parents, who are busy adjusting to the financial impact of a new arrival, to kick-start their child savings, especially those who have more than one child eligible for the scheme.
BDRC’s research also highlights the importance of bringing regular savers on board as early as possible. Its research shows that of those who didn’t immediately set up a Direct Debit when they opened a Child Trust Fund account, 56%** were fairly or very unlikely to do so in the future.
Karl Elliott, Engage’s Child Savings Strategist, commented “Whilst new parents learn to cope with the many costs associated with a new arrival, they could also be managing on a reduced income, perhaps during a period of maternity leave or if one parent leaves work to stay at home. It really makes sense for us to accommodate the needs of this group of customers, by offering the choice of a lower-level contribution to the account. In this way, parents can still enjoy making regular savings at a level appropriate to their current circumstances.”
A Balancing Act
Beverley Fuller, mother of two-year-old toddler Caitlin and six-month old baby Luke, applied to Engage to open two Child Trust Fund accounts in September. One of the main attractions for Beverly was the ability to make a lower regular contribution to the children’s accounts.
“I’m so busy with Luke and Caitlin and I rely on the internet to get most things done, so I was interested to learn that I could open an account on-line when I picked up a leaflet from my local ASDA.
Because I’m on maternity pay at the moment, I also decided to contribute the minimum amount. With two children to plan for, being able to save just £5 each month was the reason why I chose a Child Trust Fund account provided by Engage.
Whilst I want the best for my children’s future, I don’t want to compromise our standard of living now; so starting to save any amount – no matter how small – really appealed to me.”
* Engage Mutual Assurance MIS
** BDRC Syndicated Survey Wave 6 Jan – Jun 2005. Objectives: to establish parental awareness of the CTF, patterns of registration behaviour, savings intentions, account opening intentions and use of CTF funds.