April figures for cash CTFs pass £11m

Over £11m was placed into cash Child Trust Funds (CTFs) in April according to the latest statistics from the Building Societies Association (BSA).

While the figures only apply to cash CTFs and not the whole of the CTF market, the BSA reveals an additional 18,000 accounts were opened last month by providers who offer both cash and stakeholder options.

Where a choice was offered between a cash and a stakeholder CTF, 78% of parents opted for the cash version, with net receipts into cash CTFs totalling £11.6m in April.

According to the BSA, which receives its statistics from providers of cash CTFs, to date 388,000 cash accounts have been opened, with £137m in total balances, while in the last year 552,000 CTF accounts have been opened by providers of cash CTFs.

Brian Morris, head of savings policy at the BSA, says April marked the first birthday since CTFs went live, with the accounts being a great way for parents to kick start a savings habit for their child.

He says those parents who haven’t found a home for their voucher should do so, as the earlier you open a cash CTF the more interest will be paid, particularly if the account is topped up.

Morris adds: “Cash is still clearly the favourite among parents who are given a choice. More than 78% opted for cash in April, up on recent months, which possibly reflecting nervousness about the current state of the stock market.”

But he warns while net receipts into cash CTFs are the highest since June 2005, this will have been boosted by the extra £250 payments the government started making to low income families at the beginning of the tax year.

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