CTF voucherless system set to have positive impact

HM Revenue and Customs (HMRC) has released the quarterly statistics for Child Trust Funds (CTFs), revealing the number of CTF accounts opened by parents. The figures show the rate of take-up of CTFs has remained at 70%.

Kate Moore, Head of Savings and Investments at Family Investments, the UK's leading Child Trust Fund provider, comments: "These figures from the HMRC reflect the period just after the Government amended the CTF application process in April 2009. Since then, parents have no longer had to post CTF vouchers to a provider in order to open an account for their child. Instead, they have been able to open a CTF over the telephone or online.

"It is still early days for this new voucherless system but we believe that we will see an increase in the proportion of CTFs directly opened by parents - rather than allocated by the Revenue - from now on. Whilst the full impact won't be known until April 2010 when the entire life-cycle of all vouchers will be included in this process, our sales data shows that direct customers are becoming more and more likely to open accounts via phone and web whereas postal applications appear to be on the decline.

"Around a quarter of parents still miss the deadline to open CTFs for their children. Whilst it is great that nobody misses out and even those who do not actively invest their child's voucher will get a CTF account, we would still like to see more people actively choosing a provider. We believe this is fundamental to increasing financial awareness within lower socio-economic groups. Voucherless processing is a big step in the right direction but we believe that further simplification of the scheme is required if we are to increase take-up even further."

"CTFs can have a real and positive impact on social mobility, but only if parents are encouraged to engage with the scheme from the birth of their child and simplicity is the key to this."