Parents welcome trust funds

The fund will be available to be spent at age 18

Nine out of ten parents would like to pay money into the government's new Child Trust Fund, according to a survey by Virgin Money.

Under the Child Trust Fund scheme the government will pay money into a savings account on the birth of a child.

Parents will have the option of topping up the Child Trust Fund by up to £1,000 a year.

Only 53% of parents currently put money aside for their children, but 92% said they would think about contributing to one of the new funds, paying in an average of £38 a month.

Virgin Money said this would mean children could have funds worth up to £14,000 by the time they were 18.

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Under the Child Trust Fund scheme the Government plans to give every child born after September 2002 £250 at birth, with children from poorer families receiving up to £500.

This money will not be available to spend by the child until they reach adulthood.

The Treasury has said that it will announce in September whether people will be free to invest the Child Trust Fund in the stock market or will just have to make do with a standard High Street deposit account.

Stock market based investment accounts are reckoned by financial experts to produce higher long term growth than standard deposit accounts.

But stock market investments are riskier than High Street savings.

"Our research suggests that those parents who are most likely to top up their children's fund would like the opportunity to be able to invest directly in equities and are unlikely to be satisfied with anything less," said Gordon Maw, Virgin Money director.