Many child trust funds are allowed to expire by parents, new analysis from the financial firm has shown.
Many parents are not maximising their savings in child trust funds (CTFs), it has been discovered.
According to new figures from Nationwide, one quarter of all CTF vouchers have expired - with families not contacting providers with how they want the money to be invested. Moreover, 43 percent of the vouchers issued this year were found to not have been invested yet, and thus are in danger of expiring.
CTFs work by a £250 voucher being sent to the parents of a new-born child by the government, which are then to be sent back for it to be invested in either cash or equities. The money then builds in value, and can be accessed when the child turns 18.
Should parents not get back in touch within 12 months, the voucher is then automatically invested in a stakeholder account.
Matthew Carter, savings director at Nationwide, commented: "It's disappointing that so many vouchers have either expired or are not being used to open a CTF. To get the most out of it, parents should invest their child's voucher early to help it achieve its full potential."
He added: "By topping up their child trust fund on a regular basis, parents can help to give their children a head start in life."
CTFs were introduced by the government in 2005.
Compare savings accounts via money.co.uk
