Calls to save CTFs grow louder - Savings - News - Moneyfacts


Calls to save CTFs grow louder

Calls to save CTFs grow louder

Category: Savings

Updated: 14/10/2009
First Published: 14/10/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The usefulness of child trust funds (CTFs) as a tool to teach children about saving has been highlighted as a further reason why these under threat accounts should not be scrapped.

Last week's announcement by the Shadow Chancellor George Osborne that the Conservative Party would cut spending on the funds should it reach power has since drawn considerable criticism.

At present, all families receive a £250 voucher when their child's birth is registered, with an additional £250 (£500 for poorer families) paid in by the Government on the child's seventh birthday.

However, under the Tory proposals, new spending on CTFs would be stopped for all but the poorest third of families, while the Liberal Democrats have gone even further by saying they would scrap the scheme altogether.

Responding to the announcement, Victoria Nye, director of education at the Investment Management Association (IMA), said that CTFs were an ideal hook to encourage children to learn the importance of saving money.

"It's a lesson from which all children, and in time, the State finances will benefit, as more people save younger and for longer," she added.

"The Personal Finance Education Group (pfeg) is already working with primary school teachers across the country on this very theme, knowing that all seven year olds have a CTF. Cutting CTFs would undermine the value of those lessons and could potentially halt further progress in promoting a savings culture among young people."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Savings rates plummet to fresh lows yet again

It’s becoming a recurring theme, and unfortunately, it’s showing no signs of stopping. Savings rates have plummeted to fresh lows once again as the impact of the base rate cut continues – and this month, product availability has followed.

Less than half of savings accounts beat inflation

Official figures show that inflation jumped up during September, with CPI rising to 1%. Not only does this mean that consumers may begin to feel the impact on their wallets, but there are now far fewer savings accounts that will beat inflation.

Number of savings accounts falls to record low

As if the continued drop in savings rates wasn’t bad enough, our latest research reveals another blow to already hard-pressed savers, with the number of accounts available having fallen to a record low.