Top of the top ups

While much attention on Child Trust Funds has focused on the volume of government vouchers that have been issued and lost, F&C reports that the overwhelming majority of parents and grandparents in its CTF have been putting their hands in their own wallets and topping up their children's accounts.

According to F&C, who manage over 51,000 CTF accounts focused around its range of investment trust companies, more than 68% have been topped up with additional payments either in the form of lump sum cheques or, in the majority of cases, a monthly direct debit. F&C suspects these top up rates are among the highest among CTF providers.

F&C's Jason Hollands, who is about to set up a CTF for family new arrival baby Isabella, said: "A regular direct debit is a very convenient way to build up a pot of money for your child. In these volatile markets, saving on a monthly basis helps even out some of the ups and downs in share prices and therefore reduces the risk of a single lump sum investment taking an immediate hit. Over the long term we think shares will generate strong returns and that time rather than timing is the thing to focus on."