Low-income families contribute more to CTFs

Child Trust Funds (CTF) are being topped up more by low-income families than those wealthier than them, according to new figures.

Although those on lower salaries struggle to get on the property ladder, they show a determination to save for their children’s future, an Engage Mutual study has shown.

Karl Elliot, Engage marketing director, said: "With more than 2.7 million CTF accounts open in the UK to date, our experience suggests that lower income families are leading by example."

Parents with a lower income are willing to invest 1.1 per cent of their post-tax monthly salary in their kids, whereas those getting paid more saved 0.6 per cent of their monthly earnings for their offspring, the data reveals.

"While dedicating a greater proportion of their household income, lower income families are also eight per cent more likely to actively seek to invest their child’s CTF than higher income families," Mr Elliot explained

A child’s CTF may only be touched when they are 18 and every child born after September 2002 is eligible for the savings account.