Monthly contributions by parents to child trust funds have increased in the last three months, with an additional 30,000 accounts now receiving direct debit subscriptions, the latest research from TISA (Tax Incentivised Saving Association) has revealed.
It means over 640,000 child trust funds now receive regular monthly contributions, worth in total in excess of £14.4 million. The figure also represents an increase of more than £800K on the previous quarter; impressive at a time when many families' finances are feeling the squeeze.
Since their introduction, almost one in three (30.8%) child trust fund accounts have received some form of additional subscription, either via a monthly direct debit or a one off lump sum.
Meanwhile, more than one in five (21.5%) accounts now have a monthly direct debit in place, with the average amount contributed having increased to £22.59, up from £22.38 in the previous quarter.
"Despite the challenging economic situation, it is encouraging that contributions to child trust funds are continuing to rise," said TISA director general Tony Vine-Lott. "Understandably, the increases are currently at a modest level, but it does confirm that parents see the value in providing their children with a financial nest egg when they reach 18."
With the introduction of the second child trust fund payment in September for those reaching their seventh birthday, Vine-Lott added he was confident that interest will have been stimulated further.
"I hope that families will use this as an opportunity to reinforce the message about money awareness as part of the broader efforts to improve the financial literacy of young people."
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