Child trust funds proving popular

More than 2.6 million children in the UK now hold a child trust fund (CTF) with the scheme proving popular among parents, according to the economic secretary.

Ed Balls said the results were “encouraging” and pointed out that around three quarters of the accounts had been opened up by parents with little prompting from the government, showing that they are looking after the financial future of their children.

Mr Balls said that HM Revenue & Customs was planning to remind all new parents of the opportunity to set up a CTF within their child’s first eight months, if parents have not done it themselves.

“I want to encourage parents, grandparents and whole families to use the Child Trust Fund not just as a saving tool but as a way of teaching children about money and savings,” the economic secretary said.

CTFs were introduced in 2002 as a savings tool for all children born after September 1st of that year.

The government provides a £250 voucher to start off the fund and then, when the child reaches seven, adds a further £250 on top.

Tags: CTFs, savings tool, saving, child, voucher, new parents, scheme