8 out of 10 'oppose changes to child trust funds'

Thursday, 18 February 2010 11:17

By myfinances.co.uk staff

Some 80% of parents oppose Conservative proposals to limit child trust funds (CTFs) to the lower income families, according to a new survey.

The online poll by MumsViews for CTF specialist Family Investments found 96 per cent think CTFs are a good way of encouraging people to save for a child's future.

At present, all children born on or after September 1st 2002 are eligible for one of the funds. The government provides £250 to open an account and a further £250 is paid in after seven years.

Family and friends can make annual contributions of £1,200 and the child cannot access the money until they turn 18.

Under plans announced by shadow chancellor George Osborne, a Conservative government would focus funding for CTFs on the poorest third of families.

According to Family Investments chief executive John Reeve, that would limit the products to households with combined annual incomes of £16,040, excluding around 560,000 children a year from receiving one of the accounts.

"These are exactly the kind of families who may want to save for their children's future but need the help and encouragement to do so," he commented.

A total of 4.78 million CTFs had been opened in the UK as of January 2010.

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