Child Trust Funds 'used by 2.6m'

There are now more than 2.6 million children benefiting from Child Trust Funds (CTFs), according to economic secretary Ed Balls.

Mr Balls, who is one of the favourites to succeed Gordon Brown as Chancellor of the Exchequer, has indicated that three in four parents are now opening accounts for their children.

"I want to encourage parents, grandparents and whole families to use the CTF not just as a saving tool but as a way of teaching children about money and savings," he said.

"We continue to pursue new approaches to informing people about the CTF, including piloting the sending of reminder letters to parents yet to use their vouchers."

A recent study from Engage Mutual revealed that many parents are still failing to do enough for the long-term financial security of their children, however.

Single parents in particular are struggling to find the money to put aside, with just one in six making regular payments into a child's savings account over the last six months.

HMRC has sent 50,000 reminder letters to parents who have not used their voucher during the first eight months - a policy that will be continued if successful.