A year after the government's launch of child trust fund vouchers (CTFs), nearly a million parents are yet to invest these on behalf of their children, according to Nationwide Building Society.
The society says parents should start saving money with the help of the CTFs "sooner rather than later" in order to benefit as much as possible from the investment.
Nationwide says parents who are saving money for their children by adding monthly deposits to their children's CTFs are securing their kids' financial futures.
Research by the society found that the larger the amount of money received by 18-year-olds, the more likely they are to spend it responsibly.
The savings provider, which offers both cash and equity child trust funds, found that those young adults who would receive £40,000 upon the maturation of their fund would save 27 per cent of their payout for the future.
A further 22 per cent would be saved towards a house deposit so they could become a first-time buyer.
Those who would receive a lump sum of £1,000 are more likely to spend most of that on shopping, the research revealed.
Nationwide says this research highlights how important it is for parents and family members to top up children's funds.
"Mums and dads can help children look to their future and consider how best they use their child trust fund," says Nationwide's executive director, Stuart Bernau. "Parents have a vital role to play in demonstrating to children the importance of saving."
Children's savings under spotlight
Children's savings under spotlight
Tue, 17 Jan 2006
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