Capita Group PLC
31 March 2004
31 March 2004
CAPITA SELECTED AS STRATEGIC SERVICE PARTNER BY THE CHILDREN'S MUTUAL
TO ADMINISTER EXISTING SERVICES PORTFOLIO & NEW CHILD TRUST FUND ACCOUNTS
Leading children's savings provider, The Children's Mutual, has selected the
Capita Group Plc ('Capita') to manage the administration of its existing
portfolio of policies and to set up a new joint service infrastructure,
providing end to end administration services, to support the new Child Trust
Fund (CTF) accounts. The agreement is projected to generate revenues to Capita
of £430 million over 20 years, in line with the growth in anticipated levels of
policies over the period. This consists of approximately £100 million from
administration of the existing portfolio and an estimated £330 million generated
by administration of the new CTF accounts, based on The Children's Mutual's
forecasts of market share.
The Child Trust Fund is a Government initiative under which all children born
since September 1, 2002, will be given a £250 or £500 endowment with further
incentives for their families to make top-up savings. The Fund will build up
over 18 years, providing young people with a stock of assets to invest in their
futures. The Government says it hopes the initiative will help strengthen the
saving habit of future generations and spread the benefits of asset ownership to
The Children's Mutual is strongly positioned to become a leading provider in
this new market, offering its products and services directly to families and
also through a wide range of distribution partners. Given that 670,000 children
are born each year and they will all have a CTF the number of people saving for
children's financial futures will increase dramatically.
As part of the arrangement, Capita will invest £2.5 million in customising
existing, proven technology to create a new, bespoke administration and customer
service infrastructure for CTF accounts. The new service infrastructure will
provide the flexible and scalable, cost effective platform essential for
delivering the service within the Government's challenging 1.5% charge cap and
meeting the initial bow wave(1) of applicants for the CTF. The Children's Mutual
intends to market its own CTF accounts and, in partnership with Capita, to
provide CTF products and administration services for other financial services
A significant number of employees working within The Children's Mutual will
transfer to Capita on the planned date of 1st June 2004 and the portfolio of
existing policies will continue to be administered in Tunbridge Wells. Capita
will recruit approximately 100 new employees to administer the CTF accounts from
its Life and Pensions business centre located in Gloucester. Customers will
experience a seamless service between the two locations through efficient use of
technology and shared expertise.
Rod Aldridge, Executive Chairman of Capita commented,
'This agreement underlines the continued success of Capita's Life and Pensions
business and follows our recent high profile contracts with Prudential
International and St. James's Place International. Our high level of commitment
to the market is clearly demonstrated by partnering with The Children's Mutual,
a recognised leader in saving for children, and our investment in creating a
bespoke Child Trust Fund end to end administration system that will be a very
attractive option for other financial services organisations wishing to offer
this CTF account without the burden of administration.'
David White, Chief Executive of The Children's Mutual, commented,
'Our focus is to ensure we provide services that help families give their
children a financial springboard into adulthood. We're extremely pleased to have
formed this strategic partnership with Capita and believe that together we will
provide the best possible support for the new Child Trust Fund as well as
continuing to give first class service to our existing policyholders. Capita's
ability to provide advanced administration and customer contact services to
their wide range of clients and their commitment in extending these service
models to our valued customers has already impressed us. This agreement will
ensure high quality, cost effective services for both new and existing
policyholders of The Children's Mutual. Our alliance provides a powerful
combination of market expertise and proven high-quality administration skills.'
The Children's Mutual was advised by Troika, the financial services management
- Ends -
(1) Approximately 1.7m accounts will be opened in quarter 1 2005 for the
eligible children born since 1st September 2002
For further information please contact:
The Capita Group Press Office 0870 2400 488
Finsbury 020 7251 3801
The Child Trust Fund forms part of the Government's strategy for saving and
asset ownership for children up to eighteen years of age. The intention to
introduce the Child Trust Fund (CTF) was announced in the April 2003 Budget.
(CTF) accounts are long term savings accounts that aim to provide eligible
children born on or after 1 September 2002 with a substantial asset base when
they come of age. As of April 2005, CTF accounts will be available for all
children eligible for child benefit and for those children in care. The scheme
will operate on a voucher system which will be sent to the parent or legal
guardian of the child for that person to open a CTF account in the child's name.
Every child will receive a further payment on its seventh birthday of a set
amount to be decided. In January 2005 vouchers will start to be issued for the
estimated 1.7m children born since 1 September 2002 who are eligible.
Notes to editors:
The Children's Mutual is the UK's only dedicated specialist in the market for
long term savings for children and its mission is to help parents, grandparents
and families fulfil their hopes for today's children. It offers a range of
savings plans, which are specially designed to do this, by combining the
benefits of our 122-year heritage as a trusted mutual society with the latest
In 2002 and 2003 The Children's Mutual was voted 'Service Company of the Year'
in the annual Financial Adviser LIA Service Awards.
The Children's Mutual is a trading name of the Tunbridge Wells Equitable
Marketing Group and only provides information about the products of that Group.
Further information about The Children's Mutual can be found at:
The Capita Group Plc is the UK's leading provider of integrated professional
support service solutions. The Group's service capabilities encompass customer
services, financial services, human resource services, pensions software
services, systems and strategic support and property services delivered to both
public sector and private organisations. With over 17,000 employees at more than
200 offices across the UK, Capita is quoted on the London Stock Exchange (CPI.L)
with revenues for 2003 of £1081 million.
In April 2003 Capita was named Company of the Year in the Royal Bank of Scotland
Sunday Times Business Awards. Capita has won Management Today's Most Admired
Support Services Company Award in 2001 and 2002.
Further information on The Capita Group can be found at: www.capita.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange