Almost three quarters (73 per cent) of the first group of Child Trust Fund (CTF) vouchers issued have been used to start savings accounts, the government has said.
A long term savings and investment product, child trust funds are started with a £250 contribution from the government, after which parents and others can add as much as £1,200 a year tax-free.
A further state contribution will be made at age seven, with the possibility of a third top up when the child starts secondary school.
However, children will not be able to access any of the money in their accounts until they turn eighteen.
The first "transitional" group of vouchers covers children who were born between September 1st 2002 and April 6th 2005, when the scheme was launched.
Approximately 1.76 million vouchers were given to parents of these children, of which 1.27 million have now been processed.
Around 2.3 million vouchers have been sent out in total, 1.48 million of which have now been used to start savings accounts.
Economic secretary to the treasury, Ivan Lewis, said he was "delighted" at the news.
"The Child Trust Fund will strengthen the saving habit of future generations and ensure that at age 18 for the first time in our history every child will have access to a financial asset," he continued.
In the case of parents who do not open accounts before the deadline expires, HM Revenue & Customs (HMRC) will automatically open stakeholder accounts with providers such as Abbey, Family Investments, Natwest and Halifax. To read more about investment news, read here.
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