Jan 22 2008
Teenagers need more help in understanding personal finance issues so that they are less likely to waste the money set aside for them in a child trust fund (CTF) account, according to one expert.
Parents and other family members are encouraged to contribute to young Britons' CTFs, but Lisanne Mealing from MDM Associates suggests that there is a risk of the resulting nest-egg savings being spent in a short space of time.
With this in mind, it is important that parents take steps to make sure that their children are engaged with financial issues at an early age and are ready to use their CTF windfalls wisely.
"At 16 what happens is the [CTF account] statements start to come direct to them and at 18 they can access the money," explained Ms Lisanne, whose company operates as an independent financial advisory.
"So if you haven't started working with them at an early enough age, they could be blinded – [they could think]: 'Wow, it's the first time I've ever actually had a big lump of money. I might just want to go and blow this."
Average lump sums being paid into the CTF accounts opened on behalf of children across the country are increasing on a monthly basis, according to the latest data from the Tax Associated Savings Association.
