Celebrations as the child trust fund generation turn six

Over 3.5million UK children now have Child Trust Fund (CTF) accounts and according to leading CTF provider, The Children's Mutual, these children, their parents and society should celebrate the fact that the CTF is changing saving habits in the UK.

Having children is expensive and as they grow into adults the costs don't stop as they consider buying their first car, entering further education or training, or purchasing their first home. The CTF was designed to provide a financial helping hand for children as they become young adults - whilst hopefully fostering a savings habit from a young age that will stay with them.

The key to maximising the potential of the CTF is to add to the account regularly. Currently customers with The Children's Mutual pay an average of £24 a month into their children's CTFs. If kept up throughout the life of the CTF, this could give a child a lump sum of up to £9,750 when they reach age 18. However, if parents, grandparents, aunties, uncles and friends worked together to top up the CTF by the maximum amount of £100 a month the lump sum could be worth £37,100 at age 18 - a significant amount that could go some way towards helping that child fulfil their dreams.

David White, Chief Executive, The Children's Mutual comments: "Parents should be celebrating that by paying into a Child Trust Fund they are going to be making a real difference to their child's future and also their own - by making the decision to prepare for future financial burdens early, parents can help to limit any potential impact on their own pocket at a time when they might be contemplating retirement or becoming mortgage free.

"The Child Trust Fund was introduced specifically to help provide young people with greater choice when they reach adulthood by providing them with a tangible, financial asset. Today's six year olds and their younger counterparts are benefitting from a national savings and investment scheme that we hope will continue to revolutionise the savings culture in the UK."

"We are also pleased that so many parents have adopted a long term approach to CTF with nearly four in five families opting for share-based CTF accounts (either Stakeholder or Non-Stakeholder). Although the value of shares can go up and down, we are buoyed by the fact that, historically, they have outperformed cash over the long term. We are keen that parents understand this when making their investment decision, in order to take full advantage of the potential for their CTF contributions."

Had today's 18 year olds and their parents had access to a Child Trust Fund and regularly added the current monthly average of £24 they could now be receiving £9,980 as the fund matures. Had such an account been topped up with the maximum £100 a month it would have produced £37,770 upon maturity with neither parent nor child paying tax on income and gains in the account.

For further information on The Children's Mutual, log on to thechildrensmutual.co.uk