No-one can touch this money until the child turns 18, and there is no tax to pay on the fund. Children can start making their own decisions about how the CTF is managed when they hit 16, although parents may want to keep a sharp eye on what they are doing with it to make sure they can avert potential disaster, such as the fund’s value plummeting.

Each year, family and friends can invest up to £1,200 into the account, and a further Government payment of £250 is made when the child reaches seven. You can choose from a cash-based CTF or be a little more adventurous with a stocks and shares based CTF, but always take advice if you are not sure what you are doing.

If you have not managed to invest the voucher within the first year of the child’s life, then HM Revenue & Customs will invest it for you. You can change who it is invested with after this has been done, but far better to make your own choice initially, as you would also miss out on a year’s growth in interest or investment returns if you delay.

The CTF does not have any impact on Tax Credit payments for the family.