Thousands of parents have failed to open child trust fund (CTF) accounts forcing HMRC to open them on their behalf, official figures have revealed.
Data from the first annual report on the government's CTF initiative showed that although 1,320,088 of the vouchers issued have led to accounts being opened by parents since the scheme began in 2002, almost 350,000 accounts have been opened by the Revenue because parents failed to do so.
"It seems you just can't give money away," said Jason Hollands, from investment trust based CTF provider F&C Asset Management.
"The statistics revealed today mean that at least £87 million of public money has been languishing in draws, chucked in the bin or stuffed down the back of a sofa.
"This cash could have been working away at generating tax free returns for kids to help fund the likes of future college fees."
The CTF is a tax-free long-term savings and investment account lasting until the child reaches the age of 18. All children born on or after 1 September 2002, who live in the UK, have child benefit claimed for them and are not subject to immigration restrictions, are eligible for a £250 voucher to open a CTF account.
HMRC opens a stakeholder account for those children whose vouchers have expired after 12 months of issue without being used.