More than 750,000 Child Trust Funds (CTFs) worth a combined £1.6 billion are sitting unclaimed, with the average account holding £2,200. The funds were created for children born between September 1, 2002 and January 1, 2011, as part of a government initiative to give them a financial head start.
Parents of eligible children received a voucher worth £250, or £500 for low-income families, which could be deposited into a CTF. If no action was taken, HM Revenue & Customs (HMRC) automatically opened an account. Of the 6.3 million accounts created, 1.8 million were opened by HMRC, leaving many families unaware of the account's existence.
Why Funds Go Unclaimed
Sarah Coles, head of personal finance at AJ Bell, said: "It’s a crying shame, because they’re worth £2,200 on average." Many families lost track of CTFs after moving house, failing to update their details, or misplacing paperwork. The scheme was later replaced by the Junior ISA, which offers tax-free savings of up to £9,000 per year for under-18s, but without a government contribution.
The government is setting up a new task force to help reconnect young people with lost or forgotten CTFs. In the meantime, parents and young people can use the government's online "Find a Child Trust Fund" tool to locate an account. Once the provider is identified, they can contact the company to access the money.
What to Do with Found Funds
Coles advised: "Some people will need the cash for emergencies immediately, but it's worth keeping at least some of it invested." Families might also consider moving the money into a Junior ISA, which typically has lower charges and a broader choice of investments, or into an adult ISA if the beneficiary is over 18.
With hundreds of thousands of accounts still unclaimed, the push to reunite families with their tax-free savings continues.
