Latest CTF figures from HMRC show little change in take-up despite difficult climate

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 showed a small reduction in the rate of take-up of Child Trust Funds.

The figures are released just before the Government amends the CTF application process so that the requirement for providers to receive the CTF voucher from parents before opening an account will become voluntary rather than mandatory.

From April 6th, parents will be able to open the CTF online or by telephone for the first time without having to send the voucher to the provider.

Kate Baker, Head of Savings and Investments at Family Investments, the UK's leading Child Trust Fund provider, comments: "HMRC's latest figures demonstrate that big changes are still needed to reduce the number of Revenue Allocated Accounts and encourage active take-up by parents.

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.

"Family Investments was at the forefront of a campaign to simplify the application process and the new measures introduced by the Government on the 6th April should go some way to improve active take-up of Child Trust Fund accounts.

Parents will no longer have the burden of posting a voucher and will instead be able to open their account in one simple step over the telephone or via the internet.

"Family Investments believes that take up should be at a much higher level and that this can only be achieved through a simplification of the entire scheme.

Parents are presented with so many CTF options at a time when their main priority is looking after a newborn baby.

With so many demands on new parents during the baby's first year 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.

We would also encourage early take-up of the CTF via a monthly prize draw.

"Take up is not the only issue however, top ups on Revenue Allocated Accounts are particularly low and more needs to be done to help educate parents and children, particularly those from the lower socio-economic groups, of their importance.

CTF Spend and Save scheme turns one.

A year ago, Family Investments teamed up with Kidstart to offer parents free automatic cash top ups into the Child Trust Fund account as they shop online.

Every Family Investments customer can top up their Child's Trust Fund for free via KidStart as they shop at over 300 online retailers, some high street partners and over the phone - every transaction provides up to 20% cashback which can automatically be deposited into their Family Investments Child Trust Fund.

Friends and family can also help to save for children - parents can link grandparents and others directly to a child's trust fund account so that as they shop their cashback savings will automatically go to help top up the fund too.

Kate Baker, Head of Savings and Investments at Family Investments comments "During these difficult times Family Investments is constantly looking for new and simple ways to help customers continue to be able to save for their children's future.

Kidstart allows parents to contribute a little towards their child's future at no cost to them.

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