Confidence in CTFs spurs extra money

Parents and relatives continue to make extra contributions into Child Trust Funds (CTFs) in increasing amounts, according to the latest TISA quarterly survey.

The survey, which covers the period to 15 December, gives insight into over 2 million accounts opened by participating providers.

Providers reported over £10 mn in live direct debits, giving the UK’s children nearly £121 mn in extra monies in their account each year. Parents, grandparents and relatives also continue to top up CTFs via lump sum contributions. Providers reported receiving over £54 mn in single payment contributions.

Importantly, the average contributions for lump sum and monthly direct debits continue to increase each quarter. Monthly direct debits are up 1% on the Autumn survey, while average lump sum contributions have seen a marked increase of 3.5%.

The long-term perspective is also very encouraging. The monthly direct debit figures have risen from £20 in August 2006 (when TISA did its first survey) to £21.43 now. While £1.43 might seem small—it actually makes a huge difference across over 470,000 live direct debits made each of the 12 months.

The average lump sum contribution has risen dramatically from £317 in August 2006 to £450 now. That increase of over 40% shows that as and when parents are able to contribute to their children’s savings, they see the CTF as the natural destination for those funds.

TISA Director General Tony Vine-Lott said, ‘I am extremely pleased with the progress of Child Trust Fund. This additional money will make a big difference in the outcomes of children’s CTFs. The fact that we are seeing increases across the board—percentage setting up direct debits, percentage making a lump sum contribution, and amounts contributed— is a testament to the success of the scheme and the extent to which parents are buying into it. We look forward to working with the Government, the industry and mainstream media to ensure that awareness of CTF continues to rise.’