Building Societies Association
Feature
Cash Child Trust Funds top the tables of best performing CTFs
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Date:
29 May 2009
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Six out of the top seven best performing Child Trust Funds are cash-based CTFs provided by building societies, according to a recent survey by Which? The survey, comparing cash, stakeholder and non-stakeholder share-based CTFs, revealed that 80% of CTFs are worth less now than three years ago, when they were launched. The worst performing were stakeholder accounts, due to the poor performance of the stock market over the past 18 months.
A similar survey from Moneyfacts shows that overall, parents who had invested just the initial £250 Government voucher in a cash CTF from the start would now on average have an account worth £310 (24.2% growth), £78 more than the average stakeholder CTF.
The Building Societies Association has today published its Q1 2009 cash CTF statistics showing:
- 77% of parents opted for the cash CTF option in Q1 at institutions offering both the cash and stakeholder option
- The balances on cash CTFs rose £5.5 million in Q1 – up 9% on the same period last year
- 51,000 CTF accounts were opened in Q1 of 2009 at institutions that offer both the cash and stakeholder option
- To date, 800,000 cash Child Trust Fund (CTF) accounts have been opened, with £466 million in total balances
Important Note: Statistics above are from the providers of the cash CTF, not the whole CTF market.
Cash CTFs account for about 25% of all CTFs opened by parents
Commenting on the figures, Brian Morris, Head of Savings Policy at the Building Societies Association said:
“Share prices have been on a downwards trend since June 2007, and the FTSE 100 closed 1,776 points (31%) lower at the end of March 2009 compared to a year earlier. Although stakeholder accounts can offer the potential for higher returns over a number of years, they also bring uncertainty, especially in the current economic situation.”
“The figures suggest that parents are placing greater value on peace of mind by opting for the cash CTF, which will guarantee a positive return once the child reaches 18 years of age.”
