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Pima praises new CTF plan - 22/06/2007

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Plans to allow credit unions to provide child trust fund (CTF) accounts have been praised by industry body Pima.

Any attempt to expand the base of providers to the CTF is to be welcome, reported Pima, which does not count any credit unions amongst its members.

In a recent survey of over 60 per cent of the CTF accounts in the UK, it was shown that take-up remained strong as an increasing number of parents use monthly direct debits and contributions to give their offspring good savings.

Over 20 per cent of parents or grandparents used direct debit to top up CTF's, with the average contribution being £20 pounds per month.

Lump sum contributions are still significant, with over five per cent of parents or grandparents using this method.

This makes for a total of £115 million in additional contributions to the fund, added to £30 million in lump sum contributions.

"We applaud the government's recent statement encouraging participation by credit unions as CTF providers," said Pima director general Tony Vine-Lott.

"The extension into areas that may not be served by traditional deposit-taking institutions is an important aspect of that. We hope more credit unions will come forward to deliver CTF," he added.

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