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Newsletter

CTF contributions continue to increase

By Sarah Engle, Tue 10 Aug 2010 - Published in Banking

Parents are continuing to invest in child trust funds (CTFs) despite government plans to scrap the products, it has been revealed.

New figures from the Tax Incentivised Savings Association (TISA) showed that contributions to the funds have actually increased over the last quarter.

The report claimed that monthly direct debit subscriptions to the 3.8 million CTFs, or 73 per cent of the market, are now amounting to more than £18 million, representing a £1 million rise on the last quarter.

Furthermore, the study showed 23,000 more accounts received a one-off lump-sum contribution over the past three months, with the average amount deposited increasing from £507 to £511.

TISA director-general Tony Vine-Lott said: "Our survey points to the continuing popularity of the scheme and it is good news that subscriptions into existing accounts will still benefit from the tax-free investment growth after the scheme closes to new applications."

Last week, Ark Financial Planning director Phil Perry claimed that the abolition of CTFs will not make a great deal of difference to many parents, as most realise the importance of saving for their children.