Child savings boost in the New Year

Good intentions at the start of the year can give children’s savings a boost, especially if last year is anything to go by, according to new research from Engage Mutual Assurance.

With January traditionally seen as a time of year for getting finances in shape, data from one of the UK’s leading Child Trust Fund (CTF) providers shows that January last year was the most popular month of the year for parents to open CTFs.

Engage Mutual, which provides Child Trust Funds to around 150,000 British children, found that, of CTFs opened with Engage Mutual over the last 12 months, almost 12 % were opened in January, possibly as parents reviewed their finances – far more than the monthly average for the rest of the year. The number of parents opening a CTF in November almost halved in comparison with January suggesting that good intentions perhaps waned as the year went on.

Regular top-ups not a New Year habit: Despite January being the most popular month to open a CTF with Engage Mutual, it came middle of the league in terms of the proportion of CTFs opened with regular monthly top-ups. The highest proportion of CTFs with a direct debit was opened in June.

One off top-ups at bonus time: The most popular month for one-off payments to be made into an Engage CTF was March, when many workers receive bonuses at the end of the financial year.

2007 up on 2006 for top-ups: Overall the amount of people topping up children’s CTFs in 2007 increased by 40% from 2006, showing that the appetite for saving for the nation’s children is growing.

Karl Elliott, 3GB spokesperson for Engage Mutual said: “New Year is a time when many of us resolve to sort out our finances. As last year’s experience in our CTF data shows, many parents will also open a CTF in January. However, we really encourage parents to invest little and often for their child for the long term, not just at the beginning of the year. By investing just £10 a month into an Engage CTF on top of the government’s contribution of £250 at birth and again at age seven,the child could get back £4,130 when they reach 18.”