Children turning seven this year will get an extra birthday present of £250 from the government as they will be the first to receive new Child Trust Fund (CTF) payments. Children from low income families and children in care will receive an extra £250.

These payments are in addition to the £250 that every child born after September 2002 receives when they are born.

The payments are designed to:

• Help kick-start families’ saving for their children

• Strengthen the savings habit of future generations

• Promote financial education

• Ensure that at age 18 every child will have access to a financial asset

Sadiq Khan MP said, “Child Trust Funds are so important in making sure that every child has the best start in life and opens up opportunities for all children, regardless of their background.

"These payments will start children saving and get them into good habits for later in life.

“From 2002 until 2007, 6,208 children in Tooting have already received CTF vouchers of £250.”

Some more facts:

• Over 4.4 million children have a CTF account.

• The total value of savings held in CTF accounts is currently around £2bn

• Over 700,000 7-year-olds per year will benefit from the age-7 payments that start this month.

• Around three-quarters of parents actively open their child’s CTF account after their child is born. But no child misses out – if parents haven’t used their voucher within 12 months, Government opens a stakeholder account on child’s behalf

• Around one-quarter of children receive contributions from parents, grandparents, family and friends into their CTF account.  Up to £1,200 per year can be saved tax-free.