Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

Child Trust Fund 'could be unfair' to older children

by
17th Jan 2005
Save content
Have you found this content useful? Use the button above to save it to your profile.

The Government needs to take action to make the most of Child Trust Funds, according to the Association of British Insurers.

A survey carried out by YouGov for the ABI shows that 42% of parents are most likely to invest their child's CTF in a deposit-based account, as opposed to "alternatives which may be more appropriate for long-term investments, such as a stakeholder account (20%), or accounts that invest in the stock market (9%)".

The survey also indicates that the deposit-based account option is "particularly popular" among women, younger parents, in Scotland and among lower income groups.

Sixty per cent of parents say they will save between £5 and £100 a month in their children's CTFs and 38% of these say they are likely to save more over time.

Almost one in five parents say they will not save more because they have an older child "and so it could prove unfair".

Joanne Segars of the ABI said: "Child Trust Funds are an important opportunity to develop the savings habit for the next generation. But it is important that the payment provided by the Government to children born [on or after 1st September 2002] does not act as a disincentive to save for parents who also have a child born before that date.

"We want the Government to monitor and review this cut-off date, to ensure that the Child Trust Fund is equitable to all children."

Parents want their children to use the fund for "worthwhile" things, the ABI added, such as higher education or training (41%), a deposit for a house (17%) and rolling over into another savings product (12%). Only 2% think it should be used to set up a business.

Andrew Goodall
[email protected]

Tags:

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.