Child Trust Fund Take Up Falls but New 'Voucherless' System Looks Set to Reverse Downward Trend
HM Revenue and Customs (HMRC) today released the quarterly statistics for Child Trust Funds (CTFs), revealing the number of CTF accounts opened by parents. The statistics show a small fall in the rate of take-up of Child Trust Funds.
(PRWEB) July 4, 2009 -- Kate Baker, Head of Savings and Investments at Family Investments, the UK's leading Child Trust Fund provider, comments:
"Whilst the drop in the number of Child Trust Fund accounts opened is disappointing, these HMRC figures are for the period just before the Government amended the CTF application process and are not a true reflection of the current situation. Since 6th April, CTF providers have been given the option to open accounts for parents without requiring them to physically bring or post a voucher. Family Investments has fully embraced this flexibility and parents can now open their account in one simple step over the telephone or via the internet.
"Our own sales data show that this new 'voucherless' system has had a significant impact on take up which is likely to be reflected in the HMRC's next quarterly figures. The number of Family Investment CTFs taken out in the first month after the introduction of the voucherless process was 14% higher than the previous four weeks.
"The impact 'voucherless' CTFs have had clearly demonstrates that improving the ease and simplicity of opening accounts is crucial to increasing take-up. This is particularly the case with parents from lower socio-economic groups who may have less experience and confidence in using financial products.
"Whilst the introduction of 'voucherless' was a step in the right direction we believe there is still much more that needs to be done. Since CTFs were introduced it has become clear that unless a parent engages with the CTF as a useful long term savings mechanism right from the start then they never fully utilise its benefits.
"We believe the amount of choice in CTF products is one of the greatest causes of inaction because some parents are confused and scared of doing the wrong thing. Parents are presented with so many CTF options at a time when their main priority is looking after a newborn baby and it is easy for Child Trust Funds to be put to the bottom of the priority list until the voucher expires. We believe that HMRC can help by removing the burden of choice and promoting the stakeholder account as the default option for parents, while retaining non-stakeholder alternatives for those who are more certain.
"CTFs can have a real and positive impact on social mobility, but only if parents are encouraged to engage with the scheme from the birth of their child and simplicity is the key to this."
For further information or an interview with Kate Baker, please contact:
Anouchka Burton
Hill & Knowlton
020 7973 3181
About Family Investments
| | - Family Investments is the trusted supplier of financial solutions for the family.
- Family Investments currently looks after around £1.6 billion of family money for over 1m people in the UK
- Family Investments is a mutual with over 30 years experience providing investments for families. We are owned by our customers which means that we are directly answerable to them
- Family Investments is the UK's favourite Child Trust Fund provider with more than 630,000 Child Trust Fund accounts
- Our expertise is widely trusted and recognised, which is why we've been chosen to provide the Child Trust Funds of these high street names; Abbey, Barclays Bank, Post Office, Sainsbury's Bank, Yorkshire Bank, Bradford and Bingley, Clydesdale Bank, Coventry Building Society, Early Learning Centre, Northern Bank and Skipton Building Society and additionally provide Post Office ISAs
- Family Investments is the trading name of Family Assurance Friendly Society and is authorised and regulated by the Financial Services Authority
- For more information log onto familyinvestments.co.uk
- To help parents prepare financially for the arrival of a new baby Family Investments has launched a new website www.MoneyForMums.co.uk
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