As the politicians debate the future of Child Trust Funds, an overwhelming 80% of parents say that all children should remain eligible rather than just those from low income families.
According to the survey conducted by Family Investments some 96% of parents believed that the introduction of the Child Trust Fund programme had been a good thing and had a positive influence on them saving for the future of their child.
Conservative proposals to reform the Child Trust Fund programme mean restricting payments to only those families with a household income of £16,040 or less. They believe that a change of this nature will produce savings of £300m per annum although the Institute for Fiscal Studies believes that the saving will be nearer £225m. The Liberal Democrats have said that they will abolish the Child Trust Fund programme altogether in favour of targeting the savings at current child related support measures.
The lower threshold for eligibility means that someone on the minimum wage would no longer be entitled to a Child Trust Fund account for their child, said John Reeve, Chief Executive at Family Investments.
Child Trust Funds have been popular with parents with 71% opening an account for their child in the first year. In the event that an account is not opened by the parent in the first year, the Treasury will invest the initial voucher into a default stakeholder scheme. Stakeholder funds invest in stocks and shares until the child is around 13 when the investment is moved into less volatile bonds. That 
initial year's worth of possible growth has been lost so all parents are encouraged to invest the voucher as quickly as possible to get the benefit of long term compounding of interest or growth. Additionally, anyone can invest up to £1,200 per year into a Child Trust Fund account to help the amount grow so that it represents a significant nest egg upon maturity when the child is 18.
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