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Rising levels of personal debt and reports from the National Debt Line that it
experienced a record number of calls during the first quarter of 2006, have
prompted the Governor of the Bank of England, Mervyn King, to warn that a
"potentially large social problem is materialising".
According to F&C Asset Management, one area of particular concern, youth
indebtedness, is likely to increase further given the introduction of student
top-up fees this Autumn. F&C believes that the sooner parents and guardians
start saving towards the future cost of a child's higher education, the better.
Jason Hollands, Head of Communications at F&C Asset Management, explained:
Estimates as to the current level of average student debt on graduation vary
with one high street bank, for example, suggesting that this was as high as
£12,640 in 2005. With the introduction of student top-up fees, the figures are
set to escalate further so it is vital that parents begin planning well ahead
"Over the long term the Child Trust Fund (CTF), which was introduced by the
Government a little over a year ago, will have an important role to play in
enabling parents and grandparents to build up a pot of cash which can be used by
the child to fund a university course.
CTFs, which are available to newborn children on receipt of a modest voucher,
can be topped up by as much as £1,200 from the parents' or relatives' own
finances.
Source:
Getting Paid
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