The Government is being forced to write to 1 million parents in the UK to get them to invest in Child Trust Funds (CTFs), after two high-profile advertising campaigns promoting them proved unsuccessful.
Despite the government ploughing millions of pounds of taxpayers’ money into promoting the flagship “nest egg” accounts, only half of the estimated 2 million CTFs have been invested.
In May, Marketing Week revealed that HM Revenue and Customs had ordered a second campaign after the first &£5m drive, created by M&C Saatchi, was said to have flopped (MW May 19). Only 700,000 of 1.7 million CTFs then issued had been banked.
Now, the Inland Revenue has been tasked with writing to 1 million households that have received the bonds but not invested them to urge them to do so before time runs out. A simplified version of an “over-complicated” pamphlet explaining CTFs will also be mailed out.
Miles Bingham, marketing director of Family Investments, the leading CTF issuer, says many parents find the scheme confusing and advertising has had little effect on take-up.
He says/ “The Government has relied on advertising awareness but the problem is that 1 million mothers of newborn babies have not responded. So the Government is now having to go back to one-to-one communication.”
He says Family Investments has shied away from above-the-line advertising of its range of accounts because of a perceived poor response. However, the financial services organisation is taking on extra staff in the hope that the government mailing, which goes out in mid-October, will succeed in encouraging take-up.
The vouchers are worth between &£250 and &£500 to children born after September 2002. Parents are given 12 months to open a CTF account and although after a year they are automatically opened in a randomly chosen scheme, parent apathy means children are collectively losing about &£1m in interest a month.