Virgin recently conducted research into parents who save for their children. This was a topical survey because of the Government's plans for Child Trust Funds.
Although basic details of the Child Trust Fund were released in the Budget earlier this year, the final details are yet to be confirmed.
The results from the survey showed that 53% of parents do save on a regular basis for their children. The majority said that they would also consider making contributions to the new Child Trust Funds at an average rate of £38 per month. Almost half of the people interested would look to save their money into equity investments if available.
Our View:
Saving for the future is generally of little concern for most of the UK population. However, who can blame them when you are penalised by the State system for having savings.
We have all seen from the flop of Stakeholder pensions that the Government is not dishing out enough incentives for people to save. Yes, you get tax relief on your pension contributions but you can't get at the money until at least 50 and are then told to have it paid as an income, not a lump sum.
We believe that the Child Trust Funds might be different. Basically, the Government is proposing to match contributions like-for-like up to a certain amount. The fund will be invested until, say 18 and then can be cashed in and used as necessary. This is a far better incentive and people with the opportunity to take it up would be foolish not to. For a certain amount of money paid in, returns of 50% growth will be achieved because of the Government's contribution.
Is that not worth it?Free Fact Sheet - Registered Users - Savings For Children.