The Children's Mutual has urged parents to invest their child trust fund vouchers as soon as possible to cash in on rising equity markets.
Earlier this month was the first time that the £250 vouchers issued to parents of children born after 2002 could be invested. The children's group have warned that every day that parents delay opening their child's trust fund, means a potential reduction in the value when the child turns 18, saying that if half of the 1.7 million vouchers were mislaid or in 'to do' piles for a year, up to £29 million could be lost.
For parents intending to top up the fund by £100 per month, delaying making the investment by just 6 months could lose the child more than £1,500 when they reach eighteen.
The Inland Revenue will step in if the vouchers are not used within a year, and automatically invest them in a stakeholder account. All accounts for the child trust fund vouchers are free of income and capital gains tax.
Our view
It does make sense if you wish to invest in markets but likewise it makes no sense to rush a decision and choose the wrong company.