Parents fail to take advantage of CTFs
March saw the lowest month on record for cash Child Trust Finds (CTFs), according to figures from the Building Societies Association (BSA).
Of the 21,000 sets of parents that opened accounts in March, 62% opted for the cash CTF option where a choice was offered between that and investment-based accounts. Net receipts into CTFs were £7.8bn in March and, to date, 374,000 CTFs have been opened in the UK, with a total balance of £125m.
Brian Morris, head of savings policy at the BSA, said: “The number of CTF accounts opened in March is the lowest we have seen since the launch in April of last year. Market share of the cash providers has remained fairly constant over this period, so it seems likely that these disappointing figures will be reflected in the wider CTF market.
“It seems parents are not taking on board the need to open a CTF as soon as possible after receiving their voucher, if they are to maximise the benefit to their child. Consequently, many are being allocated CTF accounts by the Government – and missing out on 12 months’ interest or equity growth.”