UK households have been issued an urgent alert from HMRC over potentially unclaimed money. In a post on X on Thursday, October 8, the tax authority wrote: "Could you be sitting on unclaimed money? If you were born between 1 September 2002 and 2 Jan 2011, you may have a Child Trust Fund ready to claim once you're 18."
What is the Child Trust Fund?
The Child Trust Fund (CTF) was a long-term, tax-free savings account launched in 2005 by Gordon Brown, who was then the Chancellor in Tony Blair's New Labour Government. It was introduced to ensure Britons had built up savings by age 18 and to educate young people about investing.
Children born between those dates were eligible for the account, meaning those who have one are now between 15 and 24 years old. Around 6.3 million accounts were set up, many automatically, with babies given £250, and those in low-income families or local authority care receiving an additional £250. Some received a further £250 payment after turning seven, depending on date of birth, as reported by The Times.
How to claim and what's available
Parents could add their own money, and can currently add up to £9,000 a year to an existing CTF. The Government sent initial vouchers for parents to set up accounts, but if they didn't before the deadline, accounts were opened automatically with an approved provider. Many people may have accounts without knowing it.
The scheme was phased out and replaced by Junior ISAs. Funds can be moved from a CTF to a Junior ISA, though the CTF is closed permanently after transfer. Last month, HMRC said three million CTF 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".
Accounts awaiting claim
"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," HMRC added. There are three types of CTF accounts, mostly stakeholder accounts where money was initially invested in the stock market before moving to less risky investments after the child turned 13.
Cash accounts are akin to cash savings, while investment-based accounts invest in stocks, shares, and bonds, offering potentially higher returns but at higher risk. While the money belongs to the child, they can only withdraw it at 18, but can take control of the account at 16. The Government's GOV.UK locator tool can be used to find out if you or your child has an account.
