The rate at which child trust funds (CTFs) are opened by parents planning to start saving money on their children's behalf is declining, new figures suggest.
This March has seen the lowest number of new savings accounts opened since the launch of the savings initiative last year, with only 21,000 new accounts started.
Because the government will invest a CTF voucher in a generic stakeholder account on behalf of parents a year after it has been issued, parents with as yet uninvested vouchers are being urged to take action soon and exercise their right to choose an account.
The Building Societies Association (BSA) is now urging parents to examine the accounts that have been automatically opened by the government to see whether they are adapted to account holders' individual savings needs.
Rachel Le Brocq, a BSA spokesperson, says these "auto-allocated" accounts will not necessarily suit everyone's savings requirements.
She says it depends "how comfortable people are with equities".
According to Ms Le Brocq, one in four of the accounts that are opened are cash accounts.
Therefore, she says, it seems that parents are "keen to invest in the stock market" when it comes to choosing the best way to save money on their children's behalf.
Saving money in new CTF accounts slowing
Saving money in new CTF accounts slowing
Wed, 10 May 2006
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