More parents pay into CTFs
The most recent PIMA Child Trust Fund Survey reveals that increasing numbers of parents are saving for their children’s future through the CTF. The survey, taken from 74.4% of opened accounts, reveals that greater numbers are topping up their child’s CTF via monthly direct debits and lump sum contributions.
Nearly a quarter (23%) of parents are choosing to increase their child’s CTF by setting up monthly direct debits. These contributions average around £21 pcm, meaning that parents, relatives and friends are saving for children’s futures to the tune of over £85,000,000 pa.
Some parents prefer to make lump sum contributions. Contributions using this method have also increased, with nearly 6.1% of accounts having received a lump sum contribution—a rise of 0.4% from the last survey.
Taken together, nearly one third of parents, grandparents and relatives are on course to augment children’s savings by over £175,000,000 via the CTF.
But the value of these extra contributions isn’t limited to the extra money. The active involvement of adults in their children’s savings, and ultimately their future, will have a positive affect on the whole family.
PIMA recently made a submission to HM Treasury’s consultation on improving financial capability in the UK. PIMA argued that using CTF as a universal tool for children and families is vital to better the understanding of savings, investments, money and financial matters at large. PIMA’s submission states,
‘In giving each child an asset at birth, the Government effectively provides a real-life example that can be used to educate children in the classroom and the entire family about finances and managing investments over the long-term. By embracing the broader potential of the CTF beyond its value at maturity, the Government will maximise the social utility of this scheme in a way that has never been done before in the UK.’
PIMA Director General Tony Vine-Lott said,
‘These results are very encouraging. They show that parents are taking the CTF seriously and making the additional contributions to give their children a greater asset when their fund matures at 18. While there is still more to be done by parents, the Government and providers, these figures continue to move in the right direction—greater numbers of families are contributing more for their children’s future.
PIMA is working closely with the Government to ensure that millions of young adults will realise the full potential of their CTFs—through the value of their fund and a greater understanding of financial matters.’
Notes to editors:
PIMA is the leading trade body for CTFs and tax incentivised savings. It has worked with the Government to develop and implement the CTF. This is the third quarterly CTF survey it has conducted.
PIMA wants to remind parents and their families that every eligible child could benefit from tax free saving of up to £1200 per year to build into a nest egg for them when they reach 18.
If parents have questions or concerns, they should call or contact their CTF provider or contact the Government’s information helpline on 0845 302 1470 or by visiting www.childtrustfund.gov.uk
For more information:
Tony Vine-Lott, Director General, PIMA
07790 006108
Iain Anderson or Jacob Coy, Cicero Consulting
020 7665 9535
07886 197086