1 million CTF vouchers have been ignored

baby_boomer

Up to December 2007 the number of Child Trust Fund vouchers issued to date has been 3.5m+
whereas the number of CTF vouchers invested by parents has been 2.5m-

Does this show that parents don't understand or are just too busy?

Of the parents who invested, just under 25% have chosen cash CTFs with building societies.

norm_diploom

I'm one of those parents - and am trying to time entry since I expect stock markets to fall further. If i'm wrong, or if I run out of time, I will invest the ctf in cash before the year is up - I certainly don't want this government to make any investment decisions on my behalf!

I do suspect though that a lot of it is inertia - too busy to do the research: there are always other priorities with kids.

baby_boomer

Good luck with your decision. I totally agree with you that to drift into a government chosen stakeholder is the worst of all decisions.

But perhaps the government has added to the problem by saying that if you do nothing the government will invest it for you and some hard pressed parents are using this as a get out clause to do nothing. Some people still trust the government more than themselves on financial matters :eek:

It's a pity. 1 year's lost compound interest / growth could add up to something quite significant at age 18.

Milarky

baby_boomer wrote: »

Of the parents who invested, just under 25% have chosen cash CTFs with building societies.

That doesn't answer what proportion of CTFs are 'cash' overall (I assume it's B/Socs crowing that they more in proportion to their actual share of cash deposits?)

norm_diploom

baby_boomer wrote: »

But perhaps the government has added to the problem by saying that if you do nothing the government will invest it for you and some hard pressed parents are using this as a get out clause to do nothing. Some people still trust the government more than themselves on financial matters :eek:
/quote]


Yes, knowing that there is a safety net there probably does have that effect; if it was a case of "use it or lose it", then everyone, including me, would probably have a lot more urgency.

Trouble is that there are some parents who are unlikely to ever make the investment decision for themselves, and arguably their kids are among the ones who need the ctf most, and so they need to be protected from losing out due to their parents' inaction.


Maybe a more obvious carrot (besides the up to a year's interest which you mention), an early sign up bonus or something, would work - but it's difficult to see who would fund that.

Thanks anyway for the reminder, I will get my own house in order first!!

baby_boomer

To Milarky

To get the proportion of Cash CTF's you've just got to add on the cash accounts taken out with Abbey, the only significant non-BS Cash CTF provider.

That makes Cash CTFs to date about 20% of total CTFs.

Hope this helps you

Interestingly you are more likely to choose a cash CTF if household income is above £20K than if it is below £20K. This actually goes against perceived investment wisdom. I guess that this is largely because it is the under £20K income brackets that are more likely to leave the decision to the government.

I also find it interesting that even in the higher income brackets that less than 30% have added to Cash CTFs. And this is in spite of the fact that the CTFs have offered consistently higher rates than other children's cash accounts.

It won't surprise anyone to learn that if the government opens the CTF by default less than 2% of parents add to the investment.

25% of CTFs to date have been opened by the government as stakeholders

In West Belfast this rises to 50% (probably caused by the shortage of building societies).
In Liverpool Walton it is 40%.

surreysaver

It was difficult to invest the thing. We were going to invest it at Abbey, but they refused because I did not have identification with me. A CTF must be the only account you can open without ID, but Abbey staff do not know this. You provide all the ID to get the bl00dy voucher in the first place. Needless to say, I ended up investing it elsewhere, and am glad Abbey did not get the money now. It is not as easy to open the account as the Government would have people believe, and when you've got a new born in the house, investing this voucher can be low on the list of priorities - there are much more urgent things that need dealing with.