They were designed to give poor children the modest nest egg that most middle-class teenagers expect from their parents when they turn 18.

But research shows that it is the middle classes who are making the most of the Government’s Child Trust Funds. Twenty-three per cent of such funds are being topped up by parents. The average monthly top-up is £21.20.

The research was carried out by the Social Issues Research Centre think-tank on behalf of The Children’s Mutual, which manages £250 million worth of such funds and which found that among its own clients the extra savings were even higher, with 47 per cent of parents topping up their children’s funds using direct debits.

Child Trust Funds were introduced in 2002, and every baby born after September 1 that year has received a deposit of £250. Less well-off children get an additional £250 and the Government has promised a second deposit for all children at 7; poorer children could get even more.

Unlike other benefits, there is no problem with take-up. If parents do not invest the £250 or £500 vouchers in the accredited banks or investment companies, the money is automatically invested on their children’s behalf.

The first tranche matures in 2020, when the new “trust fund generation” reaches 18. The study estimates a total payout of £2.4 billion. Those children lucky enough to have had their funds topped up by the maximum £100 a month will receive £37,100 in September 2020, worth about £28,590 when inflation is taken into account.

According to the research – the first significant analysis of the impact of the funds will have – the average account will pay out £9,500.

To get an idea of how it will be spent the researchers asked today’s 18-year-olds what they would do if they suddenly received a lump sum. More than half said that they would use it to pay for higher education, and 32 per cent said that they would use it as a deposit on a house. Twenty-two per cent said that they would use it to travel.

The funds could shake up the property market in 2020, with young people once again being able to buy their first homes in their twenties. Soaring prices in the past decade mean that the average age of a first-time buyer is now 34. Only 15 per cent of first-time buyers are under 25, compared with 25 per cent 10 years ago.

Even if most of the trust fund cash goes to pay university expenses, it will still speed up entry into the property market as graduates will not have to spend years paying off overdrafts before saving for deposits.

The report forecast that the average first-time buyer deposit would be £18,800. David White, chief executive of The Children’s Mutual, said that he was not surprised that so many parents were helping out their children by topping up their funds and asking other relatives to do the same.

“Seven out of ten of today’s children expect to go to university, graduating with debts of £12,000, and the cost of a deposit for a house rose 450 per cent in the ten years from 1995,” he said. “There is no way that today’s children can meet these costs alone and topping up their Child Trust Fund and inviting grandparents to do the same, is a potential solution.”

However, parents would do well to remember one important feature of the Child Trust Fund: it is their child who cashes in the investment and decides what to spend it on.

The research found that 42 per cent of parents feared that their children would “blow” the money. Half as many thought their offspring would use it for a deposit on a home.

Official data shows, unsurprisingly, that the poorest families save the least. Almost half of households with an annual income of less than £10,400 have no savings at all, compared with less than 10 per cent of those earning more than £52,000.

Low-income families prefer savings they can dip into in emergencies, such as premium bonds, and tend to avoid schemes like the Child Trust Fund or pensions that cannot be touched.

Kerry and Matt Carmody, from Sunbury-on-Thames, have been topping up their children’s trust funds by the maximum £100 a month since they got their vouchers. If they continue to do so, Josh, 4, and Jasmine, 2, will receive the full £37,100 when they turn 18. Mrs Carmody said: “The fact that you get a £250 in the post from the Government was an incentive to do it straight away. If it hadn’t been for that it would have probably taken us a few years to get round to it. “We have our child benefit paid in directly to the trust fund and then make up the rest of the £100 ourselves. I was staggered when we got an update which showed that Josh’s fund is worth £4,000.” Mrs Carmody, 38, a marketing manager for GlaxoSmithKline, said that she had nothing when she turned 18. “But it was easier in those days. I went to university when there were still grants. I worked in the holidays so I had no debts. That meant I could buy my first flat before I was 30.” She and her husband are aware that the children might not spend the money as they would like. “There will need to be some conversations beforehand about what the money is for. But I would still rather they had the savings than not,” she said.

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