A Child Trust Fund is way of saving for your children in a tax-efficient fund.

Before your child's first birthday, the Government will send you a voucher worth £250 (reducing to £50 for children born between 1st August 2010 and 2nd January 2011). If you're on a low income, the voucher could be as much as £500, (£100 for children born between 1st August 2010 and 2nd January 2011). The voucher can only be used to open a Child Trust Fund account.

The initial payment is just the first step - you can pay up to £3,600 every year into the plan and any growth in the value of the plan is entirely tax free. What's more, when the child reaches the age of 18, they can use the money as they wish.

The government announced changes to the Child Trust Fund to remove eligibility for children born after 2nd January 2011.