According to research from UK financial services firm Co-operative Insurance, the rising costs associated with education, marriage and house buying are making parents think about their children's long-term interests this Christmas, bringing Child Trust Funds into the spotlight for the festive season.
In a survey of 1,000 Child Trust Fund (CTF) account holders, Co-operative Insurance (CIS) found that more than six out of 10 (62%) parents would prefer friends and family to contribute to their children’s future savings now, before they reach an age where peer pressure forces people to buy them the latest high-tech toys and gadgets.
The added advantage of putting money into a CTF this Christmas is that all benefits can now provide tax-efficient savings for even longer. This follows the recent UK government announcement that CTF accounts can be rolled into an ISA when children reach the age of 18.
A contribution to a young child’s CTF account is an ideal Christmas gift and is a great alternative to the hassle of the shopping, wrapping and the usual clutter of traditional gifts, commented Zack Hocking, head of savings and investments at CIS.
As a result of the government’s announcement, children will be able to move seamlessly from a CTF into a tax-free ISA. This is a fantastic opportunity for children to maximize the benefits of saving and to provide them with the means to help meet major expenses in the future, such as the cost of going to university or buying a first home, he continued.