AFS supports Government moves to improve take-up of CTF

Yesterday’s report by HM Revenue and Customs indicates that three-quarters of parents now open a Child Trust Fund for their child, and that a quarter of accounts are being topped-up by parents.

But more needs to be done, and Association of Friendly Societies (AFS) has been working with Treasury to explore ideas for improving take-up, and welcomes new Government initiatives to make it easier for parents to invest confidently into the CTF. Friendly societies have shown they have the experience and distribution to increase savings into the CTF, and currently account for around half of all Child Trust Funds opened. Furthermore, a parent investing their CTF voucher with a friendly society is around twice as likely to make further contributions.

Martin Shaw, General Secretary of the Association of Friendly Societies commented: “In the Pre-Budget Report, the Government indicated the UK savings rate had fallen to an historical low. So the latest statistics on CTF would appear to indicate that parents are foregoing their own savings in favour of accumulating funds for their children. That suggests the right kind of incentive, combined with enthusiastic and imaginative product providers, can create a market for saving. Friendly societies are already the best source of long-term regular savings products and are keen to do more to get the nation back into the savings habit.”