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Children’s Mutual has no regrets on reaching milestone

Capita now manages one million child trust funds since it took over policy administration for financial services firm The Children's Mutual.

Capita provides back-office services for The Children's Mutual after the outsourcing supplier took over the administration of funds, including IT and customer contact, in 2004.

The Child Trust Fund is a savings and investment account for children set up by Tony Blair's government. Children born on or after 01 September 2002 receive a £250 voucher to start their account. The fund has about four million funds in total today.

In 2005 The Children's Mutual realised that offering Child Trust Funds would increase the volume of business it managed. It decided the most efficient option was outsourcing.

Children's Mutual CEO David White said, "We knew if we got our positioning right we would get a big chunk of the market. The question was 'do we scale up our own technology or do we outsource?'"

He said he "swallowed hard" when he decided to outsource its administration of existing policies and Child Trust funds to Capita. "If I had to make the decision again I would do the same," he added.

The agreement signed almost exactly five years ago was projected to generate revenues to Capita of £430m over 20 years.

White said the introduction of the Child Trust Fund meant business volumes rose sharply. Before the firm became a provider it would on average add 40,000 new policies a year. But this year it will add 180,000. The company now manages about a quarter of all funds.

As part of the outsourcing contract, 200 Children's Mutual staff transferred to Capita. The firm kept a skeleton IT staff on to liaise between other departments and Capita.


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