The number of Child Trust Funds (CTFs) turned into accounts by parents remained steady in the last quarter, although the new voucherless system appears to be having an effect.
The rate of take up of CTFs was 70 per cent in the last three months, although there is an expectation that the figures, published by HM Revenues and Customs (HMRC), will record a rise when the next results are published in January 2010.
The scheme entitles children born on or after 1 September 2002 to a £250 voucher (£500 for low income families) followed by the same sum on the child's seventh birthday.
Accounts are automatically opened by the Government if parents fail to open one within 12 months of receiving the voucher. More than one in four CTF accounts are opened in this way, meaning the full potential to grow the savings pot with regular or one off contributions up to the age of 18 will not be realised.
However, the process by which parents set up accounts for their children became easier from 6 April as parents are now be able to open them over the phone or online, rather than having to produce a voucher to their provider.
"These figures from the HMRC reflect the period just after the Government amended the CTF application process in April 2009. Since then, parents have no longer had to post CTF vouchers to a provider in order to open an account for their child. Instead, they have been able to open a CTF over the telephone or online," said Kate Moore, head of savings and investments at Family Investments.
"It is still early days for this new voucherless system but we believe that we will see an increase in the proportion of CTFs directly opened by parents - rather than allocated by the Revenue - from now on.
"Whilst the full impact won't be known until April 2010 when the entire life-cycle of all vouchers will be included in this process, our sales data shows that direct customers are becoming more and more likely to open accounts via phone and web whereas postal applications appear to be on the decline."
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