Most parents with Child Trust Funds (CTFs) are failing to make the most of them because they are not topping them up, research suggests.
The Tax Incentivised Savings Association (TISA) says only a minority of CTF investors have active monthly direct debit subscriptions.
However, TISA says the amount parents are contributing is continuing to climb, with the average monthly subscription up to £21.86 from £21.20.
Tony Vine-Lott, TISA director general, says: “Bearing in mind the financial ‘squeeze’ that is affecting so many families at the moment, the continuing increase in the level of regular savings into a CTF is particularly encouraging.
“However while the number of CTFs with a direct debit subscription now exceeds half a million, the majority of accounts still do not receive any form of top-up.
“I would like to encourage more parents to commit to saving a regular amount into a CTF, obviously at whatever level they can best afford.
“It’s vitally important that children see the tangible benefits of saving at an early age. It is less how much is saved - and more that something is saved - that will teach them a lifelong lesson on how to manage their finances more effectively.”
In the sixth TISA survey, the average lump sum subscription increased by £84 on last year to £488.
The survey, which covers the second quarter of the year to 15 June, provides an insight into more than 2.25 million accounts opened by participating providers.
During this quarter 112,335 new accounts were opened and the number of accounts with active monthly direct debit subscriptions rose by 27,198.
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 http://www.childtrustfund.gov.uk/
020 7034 2636
Paul Bruns and Elaine Parkes
3,000 left to transfer
Record numbers of people aged 90 plus
From 3 to 10 October