Scrapping CTFs will not stop parents saving, says F&C
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Seventy per cent of parents of under-8s would continue to save for them even if the Child Trust Fund is abolished entirely, according to research by F&C Investments.
The Government announced today that it will scrap Child Trust Funds completely from January 1, 2011.
The survey of 2,000 parents of under-18s, conducted prior to the announcement, shows that 14 per cent of parents said they would stop saving for their children if CTFs were scrapped and 16 per cent of parents were undecided.
The survey by www.OnePoll.com shows that bank and building society accounts are the most popular non-CTF saving vehicle, with 68 per cent of parents who save saying they use such an account already, and 15 per cent would consider doing so.
Just 7 per cent said they used a children’s investment product based on investment trusts or OEICs and the same proportion said they would take more risk with their children’s investments than they would with their own.
Fifty-eight per cent did not want to risk the value of their children’s investments going down at all.
F&C director and head of corporate affairs Jason Hollands says: “It is disappointing that the Government is to prevent parents from voluntarily opening a CTF and funding it entirely from their own resources just because of a wish to cut the cost of the vouchers.
“We continue to believe that the Government should allow new, voluntary CTFs to be opened once the vouchers have been entirely phased out since the costs to the taxpayer would be limited.”
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