Children in care receive £200 Isa
Ministers hope philanthropists and other donors will be willing to come forward and top-up the new Isas for youngsters who are in children's homes, living with foster parents or have been adopted.
The Government believes the scheme will help around 55,000 children from next year but will exclude those who benefited from the Child Trust Fund, the education minister Tim Loughton said.
In a written ministerial statement, Mr Loughton added: "The Government wants to ensure that... children (in care) receive the best possible support and gain the same experience as any other young person.
"These children are some of the most vulnerable in our society and we are committed to investing in them so they can thrive.
"I want these savings to be worth much more than £200 by the child's 18th birthday and I hope individuals and organisations will also want to use these accounts to contribute and invest in the futures of these vulnerable children."
Last week, the Government announced six million children will be eligible for the tax-free Junior Isa as it looks to boost the country's savings culture.
Junior Isas are available from Tuesday, with a £3,600 limit a year, a move hailed as having the "potential to be the most successful children's savings scheme of all time".
© 2011 Press Association