Five years, five million savers

What a difference five years make - back in 2005 interest rates were on the rise and the UK savings ratio was headed for its lowest point in nearly half a century - fast forward to 2010 and the trends have reversed with one savings scheme in particular leading the march and engaging the UK population; the Child Trust Fund (CTF).

Five years on from the first vouchers being issued, leading provider The Children's Mutual has identified five reasons why the introduction of the CTF has revolutionised long-term savings for children.

Reason One - Five million accounts

Every eligible child born since 1 September 2002 has a CTF account - this means that 2010 will see more than five million children holding CTFs

Reason Two - From one in five to three in five

Before the CTF was introduced just one in five families were saving over the long-term for their children - now around half of CTF customers with The Children's Mutual set up a monthly direct debit on the day they open their child's account.  And even if you look at wider industry statistics, 31 per cent of CTFs receive some form of additional saving.

Reason Three - 85 per cent engagement rate

Nearly three quarters of parents choose to proactively open their child's CTF account.  However, a survey by The Children's Mutual also found that when asked over one in 10 parents with vouchers were opting to let the Government open the account for them - making an engagement rate of 85 per cent.  Compared to engagement rates of other savings products - 40 per cent of the adult population has a private pension and 30 per cent have an ISA - the CTF has driven the UK adult population to engage.

Reason Four - over £2.5 billion a year

The Children's Mutual estimates £2.74 billion will be available to young adults each year as they turn 18.  Currently 1.4m parents, family and friends are contributing to their children's accounts with in excess of £22m being added every month - money set to help towards the cost of higher education, first homes and beyond.

Reason Five - 50 per cent to lowest income families

The Children's Mutual's calculations suggest 50 per cent of the Government CTF investment so far is going to 1.5 million families on the lowest incomes (under £15,000), with families in the lowest income bracket saving a higher proportion of their household income for their children than those in more affluent groupings.

David White, Chief Executive of The Children's Mutual, said: "To those of us involved with the CTF, five years has gone by in the blink of an eye.  And yet in that short amount of time, the results have been startling - the CTF has done what no other savings account has achieved before - getting the mass UK population engaged and saving.  We're delighted that parents have engaged with the first universal savings scheme, realising that the only realistic way to fund their adult children's futures is to start saving now."