HMRC has issued a reminder about a financial boost for people born between September 1, 2002 and January 2, 2011. In a post on X, the UK tax authority wrote: "If you know a young person celebrating who was born between September 1, 2002 and January 2, 2011, they could have an extra birthday gift waiting for them."
"Let them know to check for a Child Trust Fund," it added, with a link to a page explaining how the tax-free savings account works. The Child Trust Fund (CTF) was launched in 2005 by Gordon Brown, then Chancellor under Tony Blair's New Labour Government. The initiative was set up to ensure that Britons had built up some savings by the time they reached 18, and to educate young people about the benefits of investing.
Eligibility and account details
Children born between September 1, 2002 and January 2, 2011, were eligible for the long-term tax-free savings account. This means the people who have one are between 15 and 24 years old today. Around 6.3 million accounts were set up, many of them automatically, with babies born between the two dates given £250, and those in low-income families or local authority care receiving an additional £250 on top.
Some got a further £250 payment after turning seven, depending on their date of birth, The Times reports. Parents were able to put their own money into them too, and can continue to add up to £9,000 a year to an existing CTF currently. The Government sent out initial vouchers for parents and guardians to set up accounts with, but would open them automatically with an approved provider anyway if they weren't returned before the deadline. As a result, many people will have accounts and be unaware that they exist.
Claims and transfers
The scheme was phased out and replaced by Junior ISAs. It's possible to move funds from a CTF to a Junior ISA, though the CTF is closed permanently after. This week, HMRC revealed that three million Child Trust Fund accounts held by 18 to 24 year-olds "have either been claimed or transferred into an Individual Savings Account", encouraging the "thousands who don’t know where their savings are to find them today".
"Latest figures show around 827,000 young adults have a matured Child Trust Fund account waiting to be claimed, which could be worth on average £2,310," it added. There are three Child Trust Fund accounts, most of which are stakeholder accounts where money was initially invested in the stock market before moving to less risky investments after the child turned 13.
Account types and next steps
You could also get a cash account akin to a cash savings account, or an investment-based account where the money is invested in stocks, shares, and bonds, with potentially higher returns - though at higher risk. While the money belongs to the child, they can only take it out when they’re 18, but can take control of the account when they’re 16. You can use the Government's GOV.UK locator tool to find out if you or you child has got one.
