Legal & General has extended its government stakeholder offering today with a Child Trust Fund launch in partnership with Engage Mutual Assurance, which takes the Legal & General brand into child savings for the first time.
Legal & General aims to claim a share of the Child Trust Fund market, which is currently estimated to be worth £1.8 billion1 by 2009/10 (based solely on the value of the minimum £250 voucher that all children born on or after 1st September 2002 will receive from the Government).
Legal & General has supported stakeholder products since their launch and the move shows that provider confidence continues to grow, particularly at Engage Mutual Assurance, who is now established as a leading stakeholder Child Trust Fund provider.
This confidence is further supported by Mintel* research, which highlighted that just three months after its launch in 2005, the Child Trust Fund had boosted child savings by 16%, particularly among families with children under 10 and parents under the age of 35:
- August 2003 – 60% of parents in this group were saving
- July 2005 – 76% of parents of children aged 0-9 were saving for their children
Legal & General Child Trust Fund customers will also be able to benefit from a low contribution rate of £5 – which is making regular saving more accessible for families, particularly those with more than one child. According to Mintel, the number of children in a family significantly affects the likelihood of parents saving regularly:
- 50% of parents with one child aged 0-14 are saving regularly, compared with:
- 45% of parents with two children, and;
- 35% of those with three or more
Andrew Haigh, Chief Executive of Engage explains:
“We are delighted to announce our partnership with Legal & General; this is a fantastic endorsement of our Child Trust Fund product. Legal & General already has a strong customer base who will look to the brand they know well to start saving for their children. We have an established track record in encouraging regular savings into Child Trust Funds , as well as excellent customer support and are delighted to have been chosen to complete L&G’s stakeholder portfolio.”
Claire Stracey, Retail Investments Marketing Director said:
“We believe that parents, who may be considering how to invest a voucher for their child would be reassured by the Legal & General brand, which has been built on offering investors value for money investments. We hope this will encourage parents, who may be holding onto their voucher while considering where to invest, to choose the Legal & General Child Trust Fund.”
The Legal & General Child Trust Fund:
- 440 advisors across the UK will be offering the Legal & General CTF
- The stakeholder Child Trust Fund is an equity product that initially invests in the Engage Investment Growth Fund
- The Child Trust Fund has built in life styling – once the child reaches age 13, the money is gradually moved from the engage Investment Growth Fund into less speculative assets – the Engage High Income Fund – by 20% each year, to lock-in gains as the account reaches maturity. At age 17, 100% of the money is invested in the Engage High Income Fund, although life styling can be switched on or off at anytime and any money transferred into the Engage High Income Fund can be transferred back in to the engage Investment Growth Fund at any time
- The annual charge is 1.5%
- The minimum contribution is £5
The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.
*Mintel Saving Products for Children 2005 “It is likely the Child Trust Funds is having a positive effect by increasing awareness among parents of the need to save and providing the impetus to do so.”
1Taking into account only government vouchers, the market is projected to be worth an estimated £1.8 billion by 2009/10. Mintel believes the additional contributions could potentially inflate this market by 50%. Families on low incomes will receive a £500 voucher. Additional contributions can be made into Child Trust Fund accounts of up to £1200 per year. For more information on Child Trust Funds visit www.childtrustfund.gov.uk