Credit unions can help set up Child Trust Fund accounts

Following the official launch of the Child Trust Fund Age Seven Payments at 11 Downing Street (9 September 2009), the Association of British Credit Unions (ABCUL) is advising families that credit unions can offer assistance in setting up and managing Child Trust Fund (CTF) accounts.

Further to the event in which Chancellor of the Exchequer, Alistair Darling, and Exchequer Secretary, Sarah McCarthy-Fry, presented the new Child Trust Fund Age Seven Payments to a group of schoolchildren, ABCUL is advising families that increasing numbers of credit unions throughout Britain can offer cash based CTF accounts along with other safe savings accounts for all ages and many purposes.

A number of credit unions can assist families with setting up initial CTF accounts, offer advice about the Child Trust Fund Age Seven Payments and advise families on how to manage their CTF accounts on an on-going basis.

Any child born on or after 1 September 2002, living in the UK and registered for Child Benefit, receives a Child Trust Fund voucher from HM Revenue & Customs for at least £250. From this month onwards, children who turn seven will get a £250 birthday boost to their CTF account. The extra money will benefit 700,000 children per year, with children in lower income families also receiving a further £250.

Mark Lyonette, Chief Executive of ABCUL, said: "By using your initial voucher from the Government, the additional age seven payment and by topping up the account when you can, and encouraging relatives to do the same, you could build up a fund that will give your child a helping hand when it comes to driving lessons, for example, their first car, a university education or even help with a deposit on a house.

"The cash savings Child Trust Fund offered by credit unions is a long term risk free deposit account, which can be topped up on a regular basis by parents, families and friends - up to £1,200 per year tax-free. Then, when your child turns 18, they receive the money deposited plus any additional interest or dividend payments.

"And because credit unions are mutuals, which only exist to meet the needs of their members, they provide convenient and ethical ways to save. Any money a credit union makes after paying its expenses is shared out among members with no outside shareholders taking any of the profits."

There are 29 credit unions providing CTF's across the country. To find out if there is a credit union you can join which offers a Child Trust Fund Account, visit abcul.coop/page/childtrustfunds.cfm.