The Children's Mutual

The Children's Mutual

August 18, 2008 09:07 ET

IFA Call to Action

Saving For Children Needs To Become a Key Priority Warns The Children's Mutual

LONDON, UNITED KINGDOM--(Marketwire - Aug. 18, 2008) - Long-term savings for children has dropped out of the top 10 drivers to visit an IFA according to unbiased.co.uk, a trend that needs to be addressed warns leading Child Trust Fund (CTF) provider, The Children's Mutual (http://www.thechildrensmutual.co.uk).

David White, Chief Executive of The Children's Mutual, said: "As consumers become increasingly concerned with the shorter-term financial implications of the credit crunch we are urging IFAs to encourage consumers to take a holistic approach towards their financial planning so they may be better placed to afford to meet their long term goals.

"Currently, one in two (48%) adults expects to finance their child's first home, while more than 2.4 million adults are expecting to take a pensions break in the next 12 months due to economic unrest. It is up to us as an industry, including IFAs to take the initiative and ensure that their clients are not just postponing potential financial challenges, but planning for them.

To put this into perspective, when today's CTF generation turns 18 in 2020, it will cost approximately Pounds Sterling 63,000 to fund a youngster through a three year university degree course and Pounds Sterling 27,300 to cover the deposit on a first home. This is a considerable financial liability for parents and illustrates the necessity for advisers to work with clients to plan thoroughly.

The Children's Mutual is calling on more IFAs to include CTF commitments as part of their standard fact find questionnaire to clients. This commitment by advisers will enable the CTF to go some way to redressing the balance that has been tipped in recent years by a proliferation of cheap credit and a lack of savings.

Mr White said: "We would urge IFAs to consider the provision for CTFs when speaking to their clients about their outgoings and financial commitments. Starting and maintaining CTF payments is vitally important and a small financial commitment by parents now can reduce the need for a much bigger one in the future. Many of today's young adults currently find themselves in financial hardship over a lack of saving and an over availability of cheap credit - we are keen that future generations enter adulthood with an asset in order to avoid the same problems."

According to The Children's Mutual, as the number of CTF eligible children increases the implications for advisers will continue to grow - more parents will need a better understanding of the benefits of long-term saving for their children and more attention will need to be paid to the provision required to fulfil those saving commitment.

Media contact:

David White, Chief Executive of The Children's Mutual, is available for comment. Please call Elspeth Rothwell on 020 7781 2366.

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