New research has raised the question as to whether children are aware of savings put aside for them through their childhood.
A survey by Orbis Investments found that nearly two thirds (62%) of 16 and 17 years old did not know they were due to receive a lump sum from their Child Trust Funds or Junior 1SA when they turn 18.
The research comes as the first Child Trust Fund recipients begin turning 18 this month, with the scheme open to children born on or after 1 September 2002.
Just under half (44%) of those surveyed by Orbis said they were unsure what to do with the money, while a quarter (23%) plan to continue saving and a further 12% will swap for a Cash ISA. A tenth (10%) of respondents said they intend to spend the money once they can access it.
According to Orbis, youngsters in line to receive a lump sum should consider investing their money, with the MSCI World Index returning 9.18% since CTFs launched in 2002, compared to a 2.08% return for cash.
Dan Brocklebank, UK director, Orbis, said: “Our survey shows that the majority of teenagers have no idea about the money sitting waiting for them, and some parents may well have forgotten these funds exist. Now that those turning 18 are gaining access to their money it is important that they consider all their options including investing, or keeping their pot invested, in order to make the most of the contributions made on their behalf.
“With investing, it really does pay to be patient and children have the advantage of an extremely long-term investment horizon. However, far too many Junior ISA accounts are held solely in cash.”
