Parents are overwhelmed by choice when it comes to saving for their children, and the government should take steps to overcome this, says Family Investments.

The Child Trust Fund (CTF) provider believes that the CTF scheme should be overhauled to reach its full potential and achieve its objective of encouraging a savings culture, especially among poorer families.

This comes after the government announced a new wave of initiatives to fight child poverty, including a child development grant, an expansion of the in-work credit pilots and extra cash for children’s centres across the country.

Miles Bingham, head of savings and investments at CTF provider Family Investments, says, ‘We applaud the government’s drive to end child poverty, and the new policies are excellent additions to existing measures such as the Child Trust Fund scheme.

‘The CTF has enormous potential as a tool for parents to set their children up with a substantial nest-egg once they reach 18 years old, which can be put forward to help enable further education and help encourage social mobility. It can also be used to educate children about managing their finances and saving.’

He concludes, ‘However, people are overwhelmed with too much choice, and this is undermining the scheme, meaning some sectors of society –particularly lower-income families – are failing to engage with it. Steps should be taken to overcome this.’