Parents who invested government child trust fund payments in shares-based accounts could have lost nearly £100 in recent stock-market falls, said a report out yesterday.

Parents who invested government child trust fund payments in shares-based accounts could have lost nearly £100 in recent stock-market falls, said a report out yesterday.

However, cash-based funds have benefited from the high interest rates being paid at the time the scheme began and the best-performing has gained £57 over three years, a survey by consumer magazine Which? said.

The report looked at the performance of child trust fund (CTF) accounts over the first three full years of the scheme's operation. It said: "The results make depressing reading, as this period ended with a major stock-market downturn.

"The FTSE-100 stood at 5780 on 30 January, 2006, but had dropped to 3626 by March 2, 2009 - £250 invested in a fund that tracks the FTSE-100 share index would have dropped in value to around £157 as a result."

All children born on or after September 1, 2002, receive a £250 CTF voucher to be invested on their behalf, with children from less well-off families receiving £500.

When economic conditions improve, parents investing in shares-based accounts should start to recover the losses they have made in the first years of the scheme and could end up better off by the time the funds reach maturity when the child is 18.

Meanwhile, council tax bills could be cut by millions of pounds if householders recycled more, Which? said. As recycling rubbish costs councils less than landfill disposal, the more people recycle successfully, the lower their tax bills should be, said the report.

But Chairman of the Local Government Association's Environment Board, Councillor Paul Bettison said that the suggestion would save taxpayers just 1p a week. "Town halls know how important it is for waste not to end up in landfill. It is the council that pays £40 per tonne in tax when rubbish ends up in the ground."

He added: "The claims being made by Which? are beyond belief. They appear to be counting dead cats and dirty nappies amongst the waste they think councils should be recycling."