WHILE the dramatic rate cut from the Federal Reserve might avert the feared US recession, similar action in Britain to help us spend our way out of trouble might have limited success - while hammering the income of savers.

The problem is we are "spent out", says uSwitch.com, the independent price comparison service, which flagged up the sharp drop in our spending power last autumn, which was subsequently confirmed by retailers.

Its latest analysis says nine million British households, one in three, have nothing left in the bank at the end of each month although "we are working harder than ever before".

It blames a "spendemic" spiralling out of control last year.

uSwitch says the average consumer has only £157 left in their bank account when all bills have been paid.

With the number of credit cards doubling since 1997 to 71 million, uSwitch says too many household budgets are sunk by debt repayment: it has soared to an average £356 per month since 1997, with 45 to 54 year olds more inclined to overspend than 25 to 34 year olds.

Nearly 13 million Britons now owe more than £5,000 in nonmortgage household debt, and nearly 12 million households have seen debts rise in the past year.

While public debate focuses relentlessly on the concept of equality, it is difficult to picture a new generation of super-rich teenagers reaching adulthood with £30,000-plus in their bank accounts and toying with the idea of launching a business.

It could happen as early as 2020, when the first recipients of the child trust fund (CTF), launched in 2002, see their savings reach maturity.

When CTF vouchers first arrived three years ago, they were greeted with scepticism, and some lazy parents. At the last count, about 3.6 million CTF vouchers had been despatched, but more than a quarter of the recipients haven't bothered to use them to open a savings account for their child.

Now a detailed study of CTFs from The Children's Mutual, a friendly society restyled by chief executive David White to promote Gordon Brown's dream of a "savings gateway", tries to put the scheme into perspective.

Compiled by The Social Issues Research Centre, it predicts an initial payout of £2.4bn in autumn 2020 to children born after September 1, 2002, a sum possibly big enough to influence the economy by triggering a new generation of entrepreneurs, and by making it possible to buy a home much earlier.

When babies are registered for child benefit, parents receive a £250 CTF voucher - or £500 for poorer children - plus an additional £250 promised by Government at age seven.

This tax-free money can be topped up by friends and family to a maximum £100 per month through childhood - and this maximum contribution could deliver £37,100 per child in September 2020, worth about £28,590 when inflation during the savings period is taken into account.

The Children's Mutual, managing funds worth £250m, reckons the average fund could produce a lump sum of £9,500 at 18.

In 2020, that might be half the deposit on a first home, expected then to be £18,800. But the survey found today's youngsters put owner-occupation third on their list of priorities at 18 after a determination to keep saving, and helping to finance university.

The strong wish of older people to save for the youngest members of their family is confirmed by figures from Norwich & Peterborough building society, based on nearly 3,000 accounts.

The data reveals that regular savers are potentially saving their entire child benefit payment each year (£941.20 for a first child), also adding £400 more. But perhaps the surprise in the Children's Mutual analysis is the claim that many might use CTF cash to avoid university: one in five of teenagers might use the lump sum to start their own business instead.

With nearly four million people already self-employed in the UK, CTFs could allow up to 150,000 youngsters a year take the entrepreneurial approach instead of continuing their studies.

For those who go on to further education, CTFs could mean more graduating with a financial "clean sheet" instead of the large debts prevalent among today's students.

Given that almost half of households with an annual income below £10,400 have no savings at all, CTFs will appeal most to families able to set aside sizeable sums for the long-term. Anything invested is locked in until a child's 18th birthday.

But new parents should stir themselves to find a CTF for their child. If not, the taxman opens an account for them after a year, from a list of approved providers.

CTFs are held either in cash or equities - and over a lengthy savings period, equities should normally be the better bet.

Advice on choosing an account is available at www.childtrust fund.gov.uk