Deposit account is top choice for CTF parents
Parents are more likely to invest their child trust fund in a deposit-based account as opposed to more long-term investment alternatives, acc-ording to research by the ABI.
The research finds that 42 per cent of parents would use deposit-based accounts, 20 per cent say they will use a stakeholder account and 9 per cent will opt for the stockmarket through a non-stakeholder 100 per cent equity account.
Nineteen per cent say they will not save more in a CTF because they have an older child and it could be unfair on the child who is not eligible.
The survey results, which come as the first vouchers for CTFs are issued, indicate that the deposit-based option is especially popular among women, younger parents, lower-income groups and in Scotland.
Forty per cent of parents want their children to use the fund for higher education, 17 per cent want it used for a house deposit and 12 per cent want the money to be rolled over into another savings product.
Head of pensions and savings Joanne Segars says: “To make sure CTFs grow to their full potential, we need to see a concerted publicity campaign from the Government about the long-term nature of these investments. This would empower parents to make informed decisions based on the merits of each type of account.”
“It is important that the payment provided by the Government to children born after September 2002 does not act as a disincentive to save for parents who also have a child born before that date. We want the Government to monitor and review this cut-off date to ensure that the CTF is equitable to all children.”Two million lose out, p18; Savings survey, p24
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