Parents 'waste tax breaks' by not using Child Trust Funds

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Parents 'waste tax breaks' by not using Child Trust Funds

An estimated £63 million is wasted each year by parents who do not make full use of the allowance provided by Child Trust Funds (CTF), it has been stated.

The CTFs offer tax breaks and parents who do not make full use of this will give away millions of pounds unnecessarily to the tax man this year, according to unbiased.co.uk.

Since the scheme began in 2005, 4.3 million vouchers to open a fund have been issued, but only 3.1 million accounts have actually been opened.

Furthermore, just 24 per cent of these have seen annual deposits since the accounts have been set up.

Karen Barrett, chief executive of unbiased.co.uk, stated: "By not using their full funding allowance each year they may potentially be gifting the taxman more money than necessary."

The amount of money handed over in interest payments could be affecting the ability of some parents to make contributions towards their child's future.

It was also recently announced by the website that the equivalent of the first 50 days pay in 2010 would for many people be used on covering the interest on their credit cards payments.

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