Yet if that money was invested, it could net nearly £50,000 based on just 7% interest over 18 years* to help them get a good start in life, says the Children’s ISA.  And if parents invested their full £3,600 tax-free yearly allowance they could net as much as £115,000.

Their survey revealed that parents on average spend £494 each year on pocket money, with Christmas, Birthdays, Easter and other festivals adding an extra £237 per annum for each child.

And that’s not counting the 44% of lucky youngsters who receive £546 extra pocket money each year from doting grandparents and other relatives as well as the 95% who get £240 on other gifts from grannies and grandpas.

With an average windfall of £1,517 for UK children, the majority of pocket money and gifts is spent on toys, games and sweets (59%) or leisure activities such as going to the cinema (23%), with just 18% putting it into regular savings accounts.

The poll also revealed that many parents and grandparents are worried for their children’s future with 57% saying they believed their children would not have the same financial security they have enjoyed, and many (30%) fearing their offspring would be unable to go to university or (44%) own their own homes because of finances.

But help is on hand from The Children’s ISA which has calculated that if parents invested that £1,517 on the new junior ISA tax free savings launching on 1^st November, they could save up to £49,696.91 by the time their youngster reaches 18.

“When you think that the average child has £1,517 spent on them over the course of a year taking into account pocket money, birthdays, Christmas and other treats, it makes sense to put some of that aside and invest in their future,” said David Dawson, Savings Director from The Children’s ISA.

“We’re not playing Scrooge and saying no to treats but our findings did show that parents and grandparents are really worried about the financial future of their families and we just want them to know there is something they can do about it.

This November will be the first time that ISA’s are available for the under 18s, and can be started for just £10, with grandparents as well as other relatives and friends able to contribute as well as parents.

Up to £3,600 tax free saving can be invested each year and when the next generation of children turn 18 they could receive as much as £115,000 - a substantial pot of money that will fund more than just their time at university.

The Children’s ISA is offering Cautious, Balanced and Adventurous options which will include low cost, actively managed, ethical and Sharia funds.

David said:  “The Children’s ISA is a simple and flexible junior ISA with the backing of some of the largest asset managers in UK including Total Clarity Funds, Prudential and Scottish Widows.

“You can pay in up to £3600 per tax year in our Children’s ISA and calculations show that a parent who saves the full allowance each year could achieve a pot of almost £115,000 by the time the child is 18 (based on growth of 5% net per annum).”

Steven Whalley, Prudential's Head of Investment Marketing, said: “We very much welcome our Dynamic Portfolio Range being selected by Children's ISA to provide their active fund choice.

"The range itself is quite youthful having only been launched in January 2010 but has already attracted over £300m in investment. We are a well established provider with a new and very popular risk-rated fund offering and see this news as further evidence of the popularity of Dynamic Portfolios."

Applications can be submitted online or by post. The ISA is operated by Avalon Investment Services who administer £300m invested primarily through Independent Financial Advisers.

Prudential has been announced as the Fund Managers in charge of delivering the active managed options through their diverse range of Pru Dynamic Portfolios.  The low cost option will be run by Total Clarity Funds, a fresh fund house with a passion for more transparent and lower charging funds.

www.thechildrensisa.com