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Further support for CTFs

Further support for CTFs

Category: Savings

Updated: 16/10/2009
First Published: 16/10/2009

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 It is now over 6 months old so the content may be out of date.

Initiatives to encourage families to save must be expanded not cut, according to the Institute for Public Policy Research (ippr).

The Conservative Party last week announced it would drastically cut back child trust funds (CTFs), so only the poorest third of families and disabled children would be eligible for one in the future.

However, the think tank believes such a move would be a mistake, suggesting that while parents want to save for their children's future, they struggle to do so.

Amongst the reasons why the institute says CTFs should be preserved is that savings rates by families on behalf of children have trebled since their introduction, with two million parents now saving for their children each month.

It adds that the monthly amounts being saved for children have increased from £15 to £24 in that time, while families in all income groups have embraced the CTF, including low income families, 30 per cent of whom add to their child's CTF each month.

"The child trust fund offers a way for parents to know that their children have some savings – and it may be the only way to ensure all children have a stake in society when they enter adulthood," said Carey Oppenheim, ippr co-director.

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