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Lewis faces quiz on CTF

The slow take-up of child trust funds is being investigated by the Treasury select committee.

With nearly one million vouchers out of the two million issued still uninvested, the select committee is set to grill Treasury Economic Sec- retary Ivan Lewis on the issue this week.

The poor statistics have brought renewed calls on the Government to do more to encourage parents to use their CTF vouchers.

Nationwide says the Gov- ernment urgently needs to demonstrate to parents the benefits of making additional contributions to CTFs and introduce a financial education programme in schools linked to CTFs. It also needs to make a swift announcement to confirm the amounts and timings of secondary top-ups and add that further top ups will be index-linked to ensure that the value of fund contributions are not eroded by inflation. Nationwide says the Government should provide tax efficient savings incentives for older children who do not qualify for the CTF. It should also address the distortions that allow young children to hold an equity CTF but pre- vent older children from investing in equities before they become 18.

Nationwide chief executive Philip Williamson says: “It is disappointing that nearly one million child trust fund vou- chers remain uninvested and we urge those parents who have yet to invest their vou- cher to do so, as their children are losing out on either potential stockmarket growth or interest if they fail to act.”

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