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CTF contributions hit £500m

CTF contributions hit £500m

Category: Savings

Updated: 31/03/2010
First Published: 31/03/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Child Trust Funds (CTFs) have been topped up by more than £500 million by parents and relatives since the launch of the products almost five years ago.

More than 4.5 million children in the UK have been given a CTF since they were introduced in April 2005, Family Investments has said, and another £300 million is predicted to be paid into the funds before the end of 2010.

It is thought that young adults will inherit a combined £2.5 billion each year from 2020 when the first generation of children gain access to their funds.

"The CTF is a groundbreaking savings initiative that means every eligible child in the UK will now have a savings pot once they reach 18," John Reeve, chief executive of Family Investments, said.

"The CTF will make an enormous difference to the social and economic fortunes of a generation and help develop a savings culture in the UK when we most need it."

The scheme, whereby eligible children receive a £250 voucher at birth and on their seventh birthday, with parents and relatives encouraged to top up the accounts by up to £1,200 a year, has been praised since its launch.

However, the future for CTFs is unclear; Labour has pledged to carry on the scheme if the party is elected in the coming months, but the Conservative Party has said it will scrap CTFs for all but the poorest families as part of the effort to cut the national deficit.

The Liberal Democrats have said they will totally do away with the programme in the event of being elected to run the country.

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