Child Trust Fund - What Do Parents Want?
14/02/2006
- 60% of parents would value an element of control over the wealth within their child's Child Trust Fund
- 80% of those asked think CTF charges are too high
- 59% will save outside of the CTF for their child
New research1 from Jump, the savings fund for children, reveals that a significant number of parents questioned have major reservations and doubts over the Child Trust Fund as a vehicle to save for their child's future.
Control over their child's finances - not likely!
More than 60% of those questioned are concerned that they will have no control whatsoever over their child's Child Trust Fund. The Government will allow a child direct access to the funds in their account when they turn 18, with no obligation to consult their parents. If the maximum £1,200 per annum was invested over an 18-year period, then a child could have access to around £28,000² - enough to start adulthood with a bang!
Charges - too high
Nearly 80% of participants thought the 1.5% 'stakeholder' cap on the Child Trust Fund, imposed by the Government, too high - with a figure of less than 1%, the kind of charge levied on saving funds such as Jump, considered more appropriate.
Choice and flexibility
Almost 60% of respondents said that they were going to invest additional sums for their child outside of the Child Trust Fund, the majority of those (40%) looking to invest into a more active, equity-based investment, which have historically almost always generated a greater return than traditional savings accounts.
Commenting on the findings, James Budden, Marketing Director, Jump said: "Although the Government must take credit for promoting saving for children, our research clearly shows many parents have misgivings about the CTF. There is a preference for greater flexibility in terms of control, price and choice of investment. Parents should take the Chancellor's cash within the CTF. However, if they intend to make regular contributions, they may be better served looking outside of the CTF product range. Global investment trusts like Witan continue to offer them transparent, flexible solutions at a competitive price."
For further information log on to www.jumpsavings.com or call 0800 082 81 80.
- ENDS -
1 The research was conducted by YouGov, amongst a sample of 338 parents of children born on or after September 1st 2002.
2 Source: UK Savings 2500+ index 18yrs as @ 31/12/04.
For further information or a Jump case study please contact:
James Budden, Marketing Manager, Jump
Tel: 020 7410 3121
Gordon Puckey, quill communications
Tel: 020 7763 6975
Eleanor Clarke, quill communications
Tel: 020 7763 6973
Notes to Editors
1. Jump, the savings fund for children is a cost-effective way to save for or support the cost of a child. Based on Witan, Jump is highly flexible, allowing you to postpone your contributions at any time. There is no initial or annual fee - just the mandatory 0.5% Government stamp duty and a 1% share dealing charge.
2. Witan Investment Trust plc
Established in 1909, Witan is one of the UK's largest investment trusts, managing some £1.45bn* (at 31/01/2005) on behalf of some 60,000 investors. Witan is listed in the 'Global Growth' sector. (*Source: AITC).
3. Background to research study
- Witan commissioned the quantitative study from YouGov in January this year, data being collected between 5th and 7th January.
- The study was commissioned to explore parental attitudes towards the Child Trust Fund, and focused on five key areas:
- Control of funds
- Topping up the savings fund
- Risk versus return
- Charges
- Fairness