Around 8 million children in the UK – out of a total child population of 11.1 million – are going without a vital kick-start to their financial future because they are too old to qualify for a Child Trust Fund (CTF), according to the Association of Friendly Societies (AFS).

Those born before 1st September 2002 comprise the ‘lost generation’ of 8 million children – or 68% of the total – that is at risk of losing a good opportunity to learn about the benefits of saving and investment, and personal finance generally, because their parents are unaware of the other tax-free savings choices they could make.

The AFS points out that Tax-Exempt Savings Plans (TSPs) could be the answer, which offer savers the facility to save up to £25 a month in a tax-free environment.

Unlike a CTF, these saving and investment plans are accessible free from taxation after 10 years, rather than the 18 years on a CTF, and can be set up by any parent or guardian in the UK.

Martin Shaw, general secretary of the AFS, said: “While the CTF has introduced 2.3 million new savers, there are still many parents who want to save for an older child.

“The TSP grants every child in the UK the financial, social and educational benefits of a regular savings and investment plan. Many of the plans are available online and can literally only take a few minutes to set up.”