Rising levels of personal debt, particularly that of young people is likely to increase following the introduction of student top-up fees this autumn, warns F&C Asset Management.
F&C says the sooner parents and guardians start saving towards the future cost of a child’s higher education, the better.
It says the average student debt is currently estimated at £12,640 in 2005, but says introducing top up fees will cause this figure to escalate.
The fund manager says child trust funds will have an important long term role to play in building a pot of money that can be used by a child to fund a university course, says director, head of communications Jason Hollands.
He says: “CTFs, which are available to newborn children on receipt of a modest voucher, can be topped up by as much as £1,200 from the parents’ or relatives’ own finances. Investing additional funds, even modest amounts, all help to make the plan worth more over the long run particularly if the right investments are chosen within the plan and the voucher does not end up languishing in a drawer for a year.”