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Over Half a Billion Pounds Saved by Parents into Child Trust Funds in 5 Years

Posted in: Products Last updated: 30 Mar 2010

As the Child Trust Fund (CTF) celebrates its fifth birthday on 6th April, Family Investments highlights the potential for the CTF to radically improve the lives of our children and says its real potential is yet to be fully realised.

More than 4.5 million children have received a CTF since its launch in 2005, which parents have topped up by more than £500m¹. Another £300m is expected to be paid in by parents and other family members during 2010 alone, which shows how the desire to save and secure the best financial future for children is building.

Looking ahead, Family Investments predicts that from 2020 – when the first of the CTF generation gains access to their fund – young adults will inherit a combined £2.5bn² each year. To achieve this, the Government has to make an annual contribution of under £500m into the CTFs.

“The CTF will make an enormous difference to the social and economic fortunes of a generation and help develop a savings culture in the UK when we most need it.”

John Reeve, Chief Executive of Family Investments, said: “The CTF is a groundbreaking savings initiative that means every eligible child in the UK will now have a savings pot once they reach age 18. The CTF will make an enormous difference to the social and economic fortunes of a generation and help develop a savings culture in the UK when we most need it.

“But could we be doing more? There are some huge amounts of money being put into the CTF on behalf of our children and I wonder if more of this could be invested into things which will improve the physical environment for the next generation, maybe into greener technologies or locating alternative energy sources. Wouldn’t the ultimate gift for our children be securing the environment in which they live?”

¹ Estimated figures based on “TISA CTF Statistics Project: Subscription profiles” December 2009.
² All figures allow for a £250 government payment at outset and then again at age 7. They assume that investments grow at 6.75% per year over a full 18 year term with contributions starting at age 0 and with an annual charge of 1.5%. These figures are not a reliable indicator of future performance, they are not guaranteed, and their future buying power would be affected by inflation. This account invests in shares so its value can fall as well as rise. Your child may receive back less than was paid in.

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