With all the talk of the government considering increasing the age of retirement to 70, and more people having to re-align their retirement plans due to a fall in their overall net worth, one begins to wonder; will our kids have to go through the same thing?

Well, perhaps one of the most important lessons that we have learnt is that being financially prudent and starting to save for ones pension as early as possible is key. With that in mind, the latest research by the HM Revenue and Customs may come as a surprise that many parents are failing to take advantage of the free money on offer to open their children a child trust fund.

In a bid to encourage more parents to save for their children’s future, the government offer a £250 voucher (and £500 for lower income families) to invest in a child trust fund, which can only be accessed once the child turns 18. However, according to the research more than one million households in the UK did not take advantage of this free money and have let the voucher expire since January 2005. This will also mean that literally thousands of children will miss out on the government’s second payment of £250 (or £500 for lower income families) when they turn 7 years old.

When investing in the Child Trust Fund, the parents have two options. The first is to put the money in a tax-free savings account that accrues interest on an annual basis. The second option is to invest the money into a stakeholder fund, which is linked to either the stock market or another investment. Although this in itself can be a daunting decision for some families, putting the money in the right account could make a huge difference for your child in the future.

So, as the summer days grow shorter and autumn starts to creep in, take some time out to investigate and take advantage of this government offering for your children’s sake.