Children's Mutual will continue to operate

SAVINGS provider The Children's Mutual is to continue operating despite closing to virtually all new business, its chief executive has vowed.

The group said on Friday that it had temporarily stopped accepting new savings business to protect the interests of current members and customers.

It will no longer open non-stakeholder child trust funds (CTFs) or Growing Up bonds, although stakeholder CTFs can still be opened.

The move comes in the wake of the government's decision to scrap child trust funds. The accounts will be phased out from next month when payments at birth are cut from 250 to 50, and no new CTFs will be opened after 31 December.

But David White, chief executive of The Children's Mutual, said that while the changes to CTFs had gone further than it had expected, the company would continue to operate.

"We are now going to have a black hole for children's savings, we don't know what children's savings are going to look like.

"When we've worked out what we think the government is going to do, what we think the right plans are for the future, then we'll start spending money on sales and marketing activity again."