CTFs offer children 'guaranteed' financial start in life

New parents have been advised to take advantage of Child Trust Funds (CTFs) as a way of securing a financial foundation for their offspring's future. According to Engage Mutual, the government scheme is an effective method of guaranteeing "children have a solid financial springboard". "CTFs mean that millions of children in the UK stand to inherit an endowment at the age of 18 without prejudice or sense of bias from society," said spokesperson Karl Elliott.

At present, where parents fail to use their child's voucher to open a CTF account within the first year of issue, the government then sets one up in the baby's name. Engage Mutual reveals that more than a quarter of CTFs are opened in this way.

The Tax Incentivised Savings Association recently disclosed that regular monthly CTF contributions continue to rise, now reaching £12.6 million.

In the fourth quarter of 2008, monthly direct debit contributions into the funds grew to an average of £22.10 from £21.99 in the previous three months.

In the 2009 budget the Chancellor accounced that an additional £100 a year will be contributed into Child Trust Funds for children with disabilities, and an extra £200 for children with severe disabilities.