8 in 10 parents do not support plan to cut Child Trust Funds
Parents are almost universally against Conservative Party plans to cut the Child Trust Fund (CTF), according to research from Family Investments.
A study of 634 parents also found that 96% thought the CTF scheme was a "good thing", with many stating that it encouraged them to save to secure their children's financial future. Nearly a third of all CTF accounts receive regular top-ups, with an estimated two million parents and relations adding £22m a month to CTFs.
One of the Conservative Party's key policy aims is to create a savings culture in the UK, yet they have outlined plans to cut the CTF for the majority of families. Currently this means that any family with a total household income of more than £16,040 will not get one. Almost three quarters of parents in our research were unaware of this potential threat to the universal CTF scheme and the same proportion said they would look upon a political party that introduced this change less favourably.
If the Conservatives' current proposals go ahead, 560,000 newborn children a year will no longer be eligible for CTFs, which they claim will save them £300m a year. The Institute for Fiscal Studies, however, has put this figure closer to £225m.
John Reeve, Chief Executive at Family Investments, said: "The CTF has a lot of support from parents who do not want to see the scheme changed. More than 80% still believe that all newborn children should remain eligible for the CTF, rather than restricting the vehicle to parents with a household income of £16,040 or less. If the Conservative's plans were implemented it would mean that children whose parents were on minimum wage would not qualify for the CTF.
"It is hard-working, low and middle income families who will be really hit by these spending cuts. These are exactly the kind of families who may want to save for their children's future but need the help and encouragement to do so. To get rid of the CTF before the long-term benefits have been realised seems very strange."