Britannia sees rise in child trusts opened

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Britannia sees rise in child trusts opened

Thu 26th Oct 2006

An increase in the interest rate for Britannia Building Society's tax-free child trust funds has seen a 20 per cent rise in the number of accounts opened.

The rate rose to 6.25 per cent and occurred last month. Since then, the building society has reported a rise in the amount of parents investing for their children through a non-stakeholder child trust fund.

Parents have the option of investing in two Britannia child trust funds; a stakeholder and non-stakeholder account. Both can be opened with a government voucher as the minimum investment.

"It's crucial parents or guardians invest their vouchers to turn them in to savings for their kids. If they don't take any action, they will lose interest and the government will invest it for them, thereby effectively removing their choice of financial provider," said Nick Pagon, savings marketing manager at Britannia Building Society.

The difference between the stakeholder and non-stakeholder option is that the former is tied in with the performance of the stock market, whereas the latter is a savings account.

A government voucher is worth at least £250 and is offered to eligible children, whereby a child trust fund can then be set up.

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