John Reeve, Chief Executive of Family Investments comments on the impact of the Budget on families

"We would have liked to have seen the Government introduce more measures aimed directly at helping families. Unemployment and a low interest rate environment are devastating the finances of families across all income groups and they are the ones really suffering from the financial and economic crisis.'"

Family Investments comments on the Budget – Child Trust Funds

"One of the primary aims of the CTF scheme has always been to provide financial help to those in society who need it most. The extra £100 a year for disabled children will give them an extra £2,900 when they turn 18 (£5,800 for severely disabled children)* which is a massive boost to their funds and will be very important for their future.

"However, we would have liked to have seen the Government provide more financial help for lower income families and those struggling with the effects of the recession. The Government already adds an extra £250 to all CTFs when children turn seven but needs to go further to support families in the current economic climate."

"CTF take-up among lower income families is low, and the revenue still allocates about 20% of CTF vouchers for those parents who don’t invest them themselves. Voluntary top-ups are still too low for the scheme to achieve what it set out to do and the Government must act now to encourage further engagement with CTFs."

Isa comment

"ISAs are still the best way for the general public to save and remain hugely popular despite the average cash Isa interest rate hitting less than 1%. However, savers have been understandably cautious in recent months. Family Investments provides the ISA for the Post Office and our research shows that the majority of people taking out a Post Office ISA choose to invest in cash. Whilst the increase in ISA allowances will be used by many savers, we are unlikely to see significant investment in shares ISAs until the public becomes more confident about the future of the economy and stock market."

* The figures allow for the £250 government payment at outset and at age 7. They assume 6.75% growth annually with payments over the full 18 years, and with annual charges of 1.5% (calculations are not exact). They are not a reliable indicator of future performance and are not guaranteed. Their future buying power will be affected by inflation and your child could receive back less than has been paid in.

 

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