Steady increase in CTF contributions

Monthly parental contributions to Child Trust Funds (CTFs) have increased with an additional 30,000 accounts now receiving direct debit subscriptions - according to the latest quarterly survey conducted by TISA (Tax Incentivised Saving Association).

Despite economic pressure on family finances over 640,000 CTFs now receive regular monthly contributions worth in excess of £14.4m; an increase of more than £800k on the previous quarter.

Covering the period up to 15 September 2009 the survey shows that 30.8% (30.2% in the previous quarter) of all CTFs in the survey have received some form of additional subscription - either a monthly direct debit or a one off lump sum.

Representing 65% of all CTFs, TISA's survey provides an insight into just under 3m accounts.

The number of CTFs with active monthly direct debit subscriptions rose to 641,717 (21.5% of all accounts).

The average amount of monthly subscription rose to £22.59 from £22.38 in the previous quarter.

9.3% of all CTFs have now received a lump sum contribution, up from 5.5% in August 2006 when the survey commenced.

The total number of CTFs that have received a one-off contribution rose to 256,586 (229,485 - June 2009, 203,174 - March 2009).

These figures suggest that around 1.4m parents and relations are contributing to their children's accounts with something in excess of £22m being added on a regular basis every month.

TISA Director General Tony Vine-Lott says: "Despite the challenging economic situation it is encouraging that contributions to CTFs are continuing to rise. Understandably, the increases are currently at a modest level, but it does confirm that parents see the value in providing their children with a financial nest egg when they reach 18.

"The introduction of the second CTF payment in September for those reaching their 7th birthday will also stimulate further interest. I hope that families will use this as an opportunity to reinforce the message about money awareness as part of the broader efforts to improve the financial literacy of young people."