May 20 2008
Child Trust Fund (CTF) opening rates have increased from 70 to 72 per cent, it has been revealed.
CTFs are initially funded by the government with an opening deposit of £250, each year parents are urged to invest up to £1,200 in the product that becomes the property of the child when it reaches the age of 18.
They were introduced for all newborn babies born after September 2002 and benefit from complete tax exemption status.
Despite this, many parents are still not taking up the opportunity to invest in their children's futures and the government is urging those eligible to start saving.
Tony Vine-Lott, director-general of the Tax Incentivised Savings Association, commented: "A key aspect of the CTF is the link between providing a significant asset to a young person turning 18 and getting children and families engaged with financial products."
According to David White, the chief executive of Children's Mutual, the credit crunch is forcing parents to save more for their children's future.
