PARENTS across the South are wasting millions of pounds by failing to open Child Trust Funds for their children.

Fifty per cent of parents who have received the vouchers from the government have yet to use them to open an account, warned friendly society Family Investments.

Its figures are in line with ones released by the government on Wednesday, which showed that 889,000 of the accounts had been opened by August 20, representing just 46 per cent of the 1.9 million vouchers issued - although this is well up on the 29 per cent of parents who had used their vouchers by the end of May.

Under the scheme, all children born on or after September 1, 2002 receive £250 in vouchers to open one of the accounts, with those from less well-off homes receiving £500.

The government will then top this up with an additional amount, also likely to be £250 or £500, at the child's seventh birthday, while parents, friends and relatives can pay in up to £1,200 a year.

Research carried out for Family Investments found that one of the main barriers to opening the funds was a lack of understanding among parents, rather than a lack of time.

Although 99 per cent of parents knew about Child Trust Funds, up to 55 per cent didn't understand the different options for investing their voucher, such as putting it into cash or shares.

Family Investments chief executive John Reeve said: "To ensure the message gets through to parents, we have been in talks with the Revenue.

"We have urged them to write again directly to all eligible parents yet to set up their children's accounts which we expect to happen this year," Mr Reeve explained.

First published: September 2