Although they don't realise it, more than 1.5 million children under the age of four already have a direct personal interest in share prices, interest rates and global stock markets.

The "savings revolution" of The Child Trust Fund (CTF), Chancellor Gordon Brown's plan to give young adults a cash lump sum on their 18th birthday, might be doing better than some critics predicted.

With CTFs available to children born on or after September 1, 2002, however, it will be early 2021 before young adults actually get their hands on any cash.

That's little help for parents in 2006 said to need around £17,000 to launch each child securely into adulthood. But CTFs still look a sensible step in our debt-ravaged economy.

Says Gillian Ford of The Children's Mutual, a friendly society specialising in CTFs: "Life's expensive for young adults. Struggling with student debt, credit cards and loans, and buying a first home won't get any cheaper.

"Giving people a financial springboard into adult life makes a huge difference to their prospects in life."

CTFs are opened with Government vouchers given to parents on the birth of their child, worth at least £250, and £500 for poorer families. Qualifying youngsters get an extra £250 on their seventh birthday, and family and friends can "top up" the fund with a maximum £1,250 per year as it grows tax-free -but all money invested, plus vouchers, cannot be touched until a child is 18.

While risk-averse parents put CTF vouchers into building society accounts, the more adventurous invest in a mixture of stocks, shares, bonds and other assets in so-called stakeholder and non-stakeholder funds. These could grow by 6-7% per year, while best cash accounts pay around 5%.

Stakeholder accounts are low-cost, with no initial charge and annual fees capped at 1.5% of value. Mainly invested in tracker funds, moving in line with market indexes, they are "lifestyled" to ensure money is moved from equities into cash ahead of maturity date, to guard savers against a shares crash just before their 18th birthday.

Non-stakeholder CTFs, investing globally in shares, bonds and cash over 18 years, look a racier bet likely to deliver fatter returns - if markets perform and fund managers work hard.

One leading fund manager, F&C Asset Management offers a choice of 14 investment trusts in non-stakeholder CTFs - including the private equity fund Graphite Enterprise which has had a superb record over the last 18 years. F&C's stakeholder CTFs are trackers moving with market indexes.

Says F&C spokesman Jason Hollands: "We try to target those families more likely to top up CTFs on a regular basis."

Latest Building Societies Association (BSA) figures show that nearly 2.5 million vouchers have been issued, with 1.65 million CTF accounts already opened.

That suggests around 850,000 vouchers are still unused, earning no interest or value while vouchers invested early on show significant gains. Sainsbury's Bank, for instance, says its CTF - invested 82% in shares, 12% bonds, 6% cash - rose 15% between April 2005 and July 2006.

About 25% of the vouchers miss their expiry date altogether - perhaps because parents are baffled by investment choices.

Says Brian Morris, BSA Head of Savings: "With summer holidays coming up, parents have a lot on their hands and their child's finances may take a back seat. But if parents fail to invest CTF vouchers within a year, the Government automatically opens a stakeholder on their behalf - which may not be their preferred option."

The BSA reckons 409,000 CTF vouchers have been used to open cash accounts. That means about 1.2 million CTFs are already invested in shares, bonds, private equity and other assets around the world. And that, says Gillian Ford at Children's Mutual, is a big breakthrough.

"We have well over 320,000 CTFs invested so far," she says, "about 90% of them from people who never invested in stock markets before. With stakeholder and non-stakeholder accounts, the great majority of parents are opting for the long-term growth potential of share-based investment."

Figures from Children's Mutual show that nearly 50% of CTFs are being topped up, by families or friends - with an average monthly sum of £24, or £6 per week. Assuming annual growth of 7%, that means a fund worth around £9,300 after 18 years.

Only one friendly society, Family Investments which linked with Barclays Bank, Asda and Sainsbury's, has more CTFs than Children's Mutual: its fund with manager New Star - 70% global shares, 30% bonds - is particularly popular.

Of course, thousands of parents and grandparents want to set money aside for children too old for a CTF. Although they may miss the tax breaks and cost limits of CTFs, regular savings plans like Stockplan, run by The Scottish Investment Trust (SIT), are worth consideration.

Stockplan requires either a minimum monthly sum of £25, or lump sums of at least £250 - and SIT delivered remarkable growth rates in the past couple of years.

CTFs are right to emphasise the attraction of regular saving. But there is still time to start saving plans for older brothers and sisters who missed the CTF bandwagon.

FURTHER INFORMATION:

Children Mutual (0845 077 1899 and www.thechildrensmutual.co.uk) publishes The Essential Guide to Money for Parents available free on 0500 800 830

Sainsbury's Bank Child Trust Fund offered in association with Family Investments (0800 731 5896 or at www.sainsburysbank.co.uk, or pick up a leaflet in store)

F&C Asset Management (0800 136 420 or www.fandc.com/ctf).

Scottish Investment Trust Stockplan (0800 424 422 and www.sit.co.uk).

Details of regular savings schemes also available from Association of Investment Trust Companies (0800 085 8520 and www.aitc.co.uk).