Children's Mutual suspends new business
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The Children’s Mutual has temporarily suspended all new business of with-profits, its Growing Up bond and non-stakeholder child trust funds.
New savings business has been suspended with the exception of the company stakeholder child trust fund, which it must keep open by law to retain its CTF provider status.
The Government announced in May that it would scrap CTFs as part of its initial £6bn of spending cuts.
The company says its decision to suspend new business was taken in response to the CTF changes brought in by the Government. It says the suspension will give it the chance to reevaluate its business.
Children’s Mutual says it will reappraise its situation in two months but, in a note on its website, said the decision has nothing to do with the solvency of the firm.
The mutual says it remains committed to the with-profits market and that its with-profits fund will function as normal but it will not currently accept new with-profits business.
Children’s Mutual says closing the fund to new business has nothing to do with the FSA’s review and it is not one of the with-profits providers being investigated by the regulator.
A spokeswoman says: “We are not under any FSA investigation. It is just an unfortunate coincidence of timing.”
The company says that all commission will continue to be paid as normal for both initial and trail commission.
It will also accept new IFA CTF business until the end of July. Direct customers will still be able to use CTF vouchers until the start of 2011, when the scheme will end.
It says: “The Children’s Mut-ual believes that to continue to invest in sales and marketing activity for new business acquisition during this reappraisal process and to accept new customers as members would not comply with its commitment to treat customers fairly.
“We realise this may cause some complications for potential clients and advisers and will do what we can to assist with any difficulties caused.”
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