The Children’s Mutual welcomes plans to increase CTF engagement

The Children’s Mutual has welcomed the Government’s annual update on the progress of the Child Trust Fund (CTF) and in particular confirmation that 24% of children’s accounts are being topped up.

In addition it applauded measures which will help more parents to actively place their CTF vouchers.

David White, Chief Executive of The Children’s Mutual said: “The figures show that the number of children being saved for over the long-term has increased by a third in just two years - from 18% pre-CTF to 24% today - which is very good news. At The Children’s Mutual 50% of accounts are having additional regular or lump sum contributions made by the children’s families, nearly three times the pre CTF average.

“However, it is also absolutely clear from today’s announcement that parents are more likely to contribute to their child’s CTF account if they have chosen the account themselves, regardless of their income. Where accounts are allocated by HMRC only 2% are being regularly topped up. This is why we are delighted that the Government has listened to providers and is taking positive steps to help more parents actively invest in their children’s future by placing the voucher before expiry.”

He continued: “The importance of getting families to engage in the whole process from choosing to open an account to adding contributions couldn’t be more crucial for the children – the average monthly top-up to CTFs is £24 which means the children with top-ups can look forward to £9,750 at age 18. Clearly choosing their child’s account themselves encourages families to top up – that’s why we welcome the Government’s proposals to increase opening rates.”

The measures announced include:

an expansion of training for voluntary and other groups such as Surestart

confirmation that reminder letters will be a permanent feature of CTF communication

a consultation on whether providers need to collect the actual CTF vouchers or just the child’s Unique Reference Number

Mr White said: “We also welcome the increase in training for groups which have daily contact with parents. The volunteers and key workers in these groups are important in providing help and guidance to new parents and, therefore, are playing a significant role in encouraging active involvement.”

He added: “With more and more parents choosing to open their child’s CTF account via the web or phone it makes sense for Government to open a consultation on whether it is really necessary for providers to collect the actual voucher or just the Unique Reference Numbers. At the moment parents applying by phone or on-line have to complete their application by posting the voucher to the provider – a step that neither parents nor providers feel is necessary.”