Just four in ten parents say they are likely to invest Child Trust Funds (CTF) in a deposit-based account for their children, research indicates.
A survey conducted by the Association of Brtish Insurers has found a minority of parents will look towards long-term investments, such as a stakeholder account (20%), or those accounts which are stockmarket-related (9%) to invest for their child's future, rather than investing in CTFs.
The Government will begin issuing out the vouchers this week, with six in ten parents saying they will pay in between £5 and £100 a month towards their children’s CTFs, while 38% are likely to save more over time.
Interestingly, one in five adults believe they will not pay in extra cash into a CTF, as they feel it would prove unfair to their children who aren’t eligible or older children who have missed out.
Uses for the funds proving most ‘worthwhile’ include, higher education or training (41%), a deposit for a house (17%) and rolling over into another savings product (12%).
Joanne Segars, ABI head of pensions and savings argues for a major publicity campaign needs to be carried out by Government, to point out to parents the importance of the long-term nature of such investments.
Segars 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 after September 2002 does not act as a disincentive to save for parents who also have a child born before that date.”IFAonline
Slow progress in improving diversity
Share purchase deal with assets of £28m
Came into effect in January
Three examples of compensation rule issues
Buying in baskets