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Child Trust Funds

Two of three parents are failing to top up their Child Trust Fund (CTF). When Gordon Brown launched the funds in 2005, it was announced that parents could invest £1,200 each year in the tax-free accounts.

But according to research from the Tax Incentivised Savings Association (Tisa), only 20 percent of schemes get average monthly contributions of £25, while 10 percent of CTF's get a lump sum added of around £530 each year.

The rates for cash are not exactly spectacular. A child investing £250 in a cash CTF with Nationwide would today have £328. After you consider inflation, the actual rate of inflation is more like 1.1 percent. If things stayed puts for the next 13 years, their entire trust fund would be worth just £199 in today's prices.

A Nationwide spokesman said: 'As a result of the historically low interest rate environment, returns on deposit accounts are generally lower now than they were a few years ago. We do encourage our cash CTF customers to save regularly; we find that around two-thirds of them do so.'

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