Friendly Societies open a further 300,000 CTF accounts in 2008

Friendly Societies opened a further 300,000 Child Trust Fund accounts (CTFs) in 2008. With 1.6 million accounts now held in total, friendly societies continue to be the predominant sector in the CTF market.

Total friendly society premiums earned by CTFs in 2008 were nearly £250 million, which accounts for around 20% of total premium income in the friendly society sector. This reinforces just how important the commitment of friendly societies to the CTF has been in making the government's flagship product a success.

Martin Shaw, General Secretary of the Association of Friendly Societies, stated: "Friendly societies have been actively promoting the virtues of the Child Trust Fund, and with distributors such as supermarkets and high-street chains, have worked hard to encourage parents and guardians to take up their government voucher, and use the account to begin to plan for their child's financial well-being.

"As a result we have seen that even at a time when the level of savings is generally very low, 40% of parents or guardians or grandparents who open a CTF have topped it up, and by an average of nearly £280. It is clear that they see the account as a great way to build up a nest egg for their children.

"Friendly societies are keen to work with the government to make the CTF even more successful. For example, around a quarter of vouchers are not taken up by parents, and whilst an account is still opened for the child, our research indicates that less that 2% of these have been topped up, meaning the value at maturity will be much lower. We have been working with government to make it easier to open an account: for instance, from April 2009 it is possible to open a CTF online or on the telephone without having to present the voucher to the provider."