Figures released by HM Revenue & Customs (HMRC) show that 72% of the first wave of parents to receive Child Trust Fund vouchers managed to invest their vouchers before they expired, with nearly 1.5 million accounts opened in total up to 20 February, writes Suzanne Greener.
The latest figures show:
• 72% of the earliest vouchers issued have so far been used by parents to open a Child Trust Fund account
• Of this earliest group (the 'transitional' group - born between 1 September 2002 and before the launch of the scheme on 6 April 2005) 1.27m accounts have been opened out a total of 1.76m vouchers issued
• 1.48 million Child Trust Fund accounts have been opened in total
• 2.3 million Child Trust Fund vouchers have been issued in total.
Children whose parents have failed to invest the voucher within the time limit allowed will not lose out but will have their voucher invested on their behalf in a process starting this month. HMRC will open stakeholder accounts on a rotational basis with one of the following providers which have agreed to take the outstanding vouchers: Abbey, Children's Mutual, Childtrustfund.com, Family Investments, Foresters, Halifax Financial Services, NatWest, Pilling & Co, Royal Bank of Scotland, Scottish Friendly Asset Managers, Schoolteachers Friendly Society, The Share Centre and Ulster Bank Limited.
One of the main providers of CTFs, The Children's Mutual, welcomed the latest figures, suggesting that the uptake showed the beginning of a change in the nation's savings habit. However, David White, Chief Executive of The Children's Mutual, urged parents to take an active role in investing their children's vouchers. Commenting on the Revenue allocation process he said: "HMRC has now
started the process of allocating accounts to providers. We have prepared our call-centre and produced explanatory literature to cope with the anticipated deluge of enquiries once parents receive notification of who their child's CTF provider will be."
White continued: "Obviously, it would be preferable for parents to make an active choice rather than waiting for allocation, and some still have enough time to do so. I would advise all parents to check the expiry date on their child's voucher and, if they can, make a decision in advance of the Revenue taking action. This is particularly important for Muslim parents who would prefer to invest in an account which is compliant with Islamic law, or for those parents who are keen on ethical investment."
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