1,000,000 uninvested child trust fund vouchers

Close to one million child trust fund vouchers are yet to be invested - seeing children miss out on potential earnings.

That is according to a new report from Nationwide Building Society, revealing that less than half of those who have been issued the savings vouchers have used them to open an account.

Under the child trust fund scheme, every child born after September 1st 2002 has been sent a £250 lump sum to invest or deposit in a bank account, with those born to parents on low incomes receiving an additional £250.

Parents, relatives and friends can then put an extra £1,200 a year into the fund, which earns interest tax-free and becomes available to the child on their 18th birthday.

If parents do not invest the voucher by April next year, the government will invest it on the child's behalf - removing any prospect of choice from the parents.

And Nationwide points out that along with a lack of choice, failure to invest the vouchers quickly means that children are also missing out on potential stock market growth or interest.

"It is disappointing that nearly one million child trust fund vouchers remain uninvested as children are losing out on either potential stock market growth or interest on their account," said Stuart Bernau, executive director at Nationwide.

"If a relative sends your child a cheque, would you wait six months to cash it? The answer to this question is probably no, so why have so many parents failed to invest their child's voucher? We urge parents to act now as the sooner the account is open, the sooner parents, friends and family can begin to make additional payments."