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The company has also reported that its customers are paying an average of £24 a month into their child's fund, which could provide a lump sum of nearly £10,000 on reaching the age of 18.

The Children's Mutual is now encouraging parents and other relatives to contribute the maximum amount of £100 a month, which could provide the significantly larger lump sum of £37,000 on the child’s 18th birthday.

As the sixth birthday of the first children with child trust funds approaches, David White, chief executive of The Children’s Mutual, said: "Parents should be celebrating that by paying into a child trust fund they are going to be making a real difference to their child's future and also their own - by making the decision to prepare for future financial burdens early, parents can help to limit any potential impact on their own pocket at a time when they might be contemplating retirement or becoming mortgage free.

"We are also pleased that so many parents have adopted a long-term approach to child trust funds with nearly four in five families opting for share-based accounts, either stakeholder or non stakeholder. Although the value of shares can go up and down, we are buoyed by the fact that, historically, they have outperformed cash in the long term. We are keen that parents understand this when making their investment decision, in order to take full advantage of the potential for their CTF contributions.”

Craig Kennedy, IFA for Innes Reid Investments, said: “Child trust funds have their place and they are very useful for some people. The only problem is that when the child reaches 18, the money is theirs and they can spend it as they like. While their parents might want them to use the money as a contribution to the cost of their university studies, the child may prefer to spend it on something frivolous.

"To address that, parents could consider saving for their children through an Isa, as this means the parent has more control over how much the child is given to spend and when. They could combine this by also saving money in a child trust fund. It all depends on how much risk the parent is willing to take."