Shropshire parents who want to save for their children's future will need to review their plans after changes to the Child Trust Fund scheme.

Pam Mason, of Dyke Yaxley Chartered Accountants, in Shrewsbury, said: "Soon after taking office, the Coalition Government announced the Child Trust Fund would be phased out to help reduce the national deficit.

"As a result, from August this year, payments at birth were reduced from £250 to £50, and from £500 to £100 for children from lower income households.

"Children will no longer receive an additional payment when they reach the age of seven, and all payments into these funds, including those for disabled children, will stop altogether from January 2011."

But Pam said families should be aware that if an account had already been opened, they could still invest up to £1200 a year tax-free.

"Despite the changes to the trust fund scheme, there are other savings options available which will help families put money aside for a child's future, but it's important to consider the tax implications of the route you choose."

All children have a personal tax allowance of £6,475 per year and parents can make gifts to their children - any resulting income will be tax-free as long as it's less than £100.

"Setting up a bank or building society account where the child's name is linked to yours is the simplest way of saving for your child.

"The parent has control of the account until the child reaches a specified age, but must use the funds in the account for the benefit of the child."

Pam said 16 and 17-year-olds could also invest up to £5,100 in a cash ISA, or parents could use their own allowance to save for them and any income received would be tax-free.

"You could also consider children's bonus bonds offered by National Savings and Investments with a maximum holding per child of £3,000.

"But whatever option you choose, it's vital you take professional advice to make sure your decision is the right one for your family's circumstances."