Over 2.5 million children now benefit from the Child Trust Fund

The Economic Secretary, Ed Balls, today announced that over 2.6 million Child Trust Fund accounts are now open. For vouchers issued in 2005, three quarters of all parents opened their children's accounts themselves. The new figures come after the successful Child Trust Fund (CTF) Week, which encouraged parents and family members to help top up the funds in their children's accounts and help raise awareness of the CTF amongst hard-to-reach groups.

Ed Balls said:

"It is really encouraging that three in four parents are opening accounts for their children. I want to encourage parents, grandparents and whole families to use the Child Trust Fund not just as a saving tool but as a way of teaching children about money and savings. I was pleased that so many MPs, members of the industry and voluntary sector came together to promote the Child Trust Fund during our week. We continue to pursue new approaches to informing people about the Child Trust Fund including piloting the sending of reminder letters to parents yet to use their vouchers."

The CTF was introduced for all children born in the UK on or after 1 September 2002, with a £250 voucher from the Government to start off each child's account, and a further £250 paid into the account at age 7. Children from lower-income households receive an extra £250 top-up at birth and at age 7. The latest figures show that for vouchers issued in 2005 a total of 2.19 million accounts were opened: 1.66 million by the parents themselves and the remainder opened by HM Revenue and Customs on behalf of eligible children.

Today the Economic Secretary announced that HMRC are trialling personalised reminder letters to parents who have not used their voucher within the first eight months. In total 50,000 reminder letter have been sent to parents at this stage.

Notes for editors

1. The CTF is a tax-favoured long-term savings and investment account for children born on or after 1 September 2002. Children are eligible provided they live in the UK, have Child Benefit claimed for them and are not subject to immigration restrictions

2. Her Majesty's Revenue & Customs (HMRC) opens a CTF account for those children whose vouchers have expired after 12 months of issue without being used (i.e. where parents have not opened the accounts themselves during that period).

3. The statistics out today are final account opening for vouchers issued in 2005. These show that 76% of parents used their voucher to open an account for their child. These statistics are available on the HMRC website: www.hmrc.gov.uk/stats/child_trust_funds/child-trust-funds.htm.

4. Further information is available to parents on the CTF website www.childtrustfund.gov.uk, including practical tools such as an account chooser - to help parents select the right account for their child - and a CTF calculator - to help parents work out what the account could be worth.

5. Child Trust Fund week was held from 15 January to 20 January. Over 85 organisations pledged support for the week and many more participated in arranging events and activities. These included information displays, drop in sessions and a variety of media activity.

6. Media enquiries should be addressed to Tom Youldon in the Treasury Press Office on 020 7270 5238 and Victoria Eld in the HMRC Press Office on 020 7147 0452.

7. Non-media enquiries should be addressed to the Treasury Correspondence and Enquiry Unit on 020 7270 4558 or by e-mail to public.enquiries@hm-treasury.gov.uk

8. This press release and other Treasury publications and information are available on the Treasury website. If you would like Treasury press releases to be sent to you automatically by e mail you can subscribe to this service from the press release site on the website.