Sam Dunn: Shame on parents who neglect baby's bonus

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The Independent Online

Apathy, it's often said, keeps me and others who write about your personal finances in a job.

If everyone were a switched-on, "up-for-it" consumer rushing around all the different banks, life companies, insurers and brokers to check and compare their deals, then we'd have little to write about. There's a sliver of truth in this: customers would, in effect, be holding lenders to account by themselves.

But the frenetic nature of modern life and the complexity of financial products can make it hard for consumers to keep up with the best deals. Staying on top of all the alternatives, offers and discounts would take more time than there are hours in the day. That leaves plenty of work for us journalists to do.

Public confusion is understandable when financial companies are chopping and changing their offers all the time. Sadly, though, many people are also failing to look for competitive deals because they are apathetic about their personal finances. A percentage point here or extra charge there means little in the grand scheme of things, they argue. To them, financial services providers are all the same: just after their money.

But making sure that you're not being taken for a ride should be seen as essential. First, and most obviously, you make more money - no bad thing. Second, your refusal to accept a poor offer by taking your business elsewhere instead should - in theory - teach the offending institution a lesson and raise standards for everybody else. Third, switching your current account, mortgage, gas supplier, insurer or investment fund is no longer the hassle it once was.

Websites dedicated to helping you do just this are now available. And in the case of current accounts, at least, there are rules to make sure that banks do your bidding quickly and without financial penalty to you. Making even the tiniest effort - such as ringing up your mobile phone provider to ask for a better deal - will usually yield some reward.

One recent example of public apathy in matters of personal finance really is unforgivable. It's the failure of parents to bother with child trust fund (CTF) vouchers. Since the first of these - worth at least £250 - was sent out a year ago, only half of parents receiving the windfall have done anything with it.

Surveys suggest the vouchers are idling because parents don't know what type of fund to invest in, are forgetful, lazy or have lost or misplaced the paperwork.

Having little concern for your own finances may be foolish, but at least you're only hurting yourself. It's another matter when your failure to act costs someone else dear.

I don't have children, but they seem to be pretty valuable to most parents. It could be argued that parents who, for whatever reason, have omitted to take any action over the CTF are guilty of some sort of neglect. They have lost nearly a year's worth of interest in a cash deposit account or returns from investment in a stock market fund. Their indolence has short-changed their children.

I doubt many of these same parents will want to explain to their children at a later date, when they turn 18, just why their CTF funds are not quite as generous as they could have been.

Under the rules of the scheme, it is now up to the taxman to pick a CTF fund at random for the children of neglectful parents. The money will be invested in a stock market fund, which may not suit some parents' attitude to risk. Some funds could carry unnecessarily high charges, too.

Any parents who have yet to invest a CTF voucher need to pull their heads out of the sand now.

Have your say

A National Pensions Day is on the way, probably in March. The Government wants to hear your views on Lord Turner's proposals, so be as frank as you can. It's not often you'll have the chance to influence such an important policy.

s.dunn@independent.co.uk

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