More than half a million young people in the UK could be missing out on savings of up to £2,000 each, as hundreds of millions of pounds in Child Trust Funds remain unclaimed, according to the National Audit Office (NAO). The spending watchdog has warned that many accounts are at risk of being forgotten or lost track of by their owners, though the money remains safe until claimed.
Child Trust Funds are tax-free savings accounts set up by the government for every child born between 1 September 2002 and 2 January 2011. The government paid over £2 billion into these accounts for 6.3 million children, with most receiving around £250, and those from low-income families or in local authority care receiving an additional £250. Many funds were invested in stocks and shares, bringing the total market value to £10.5 billion as of April 2021.
Accounts mature when the child turns 18, but by April 2021, only 55% of matured funds had been claimed. The NAO estimates that more than a quarter of all Child Trust Funds have been untouched for a year or more after the owner turned 18. HMRC data shows the average unclaimed amount is £1,911, with higher sums for those whose parents added extra contributions.
Gareth Davies, head of the NAO, said: “At a time of economic hardship for millions of people across the country, it is important the government does enough to make sure young people are aware of, and can access, their child trust funds.” Public Accounts Committee chair Meg Hillier added that the money could be “a vital lifeline to young people, particularly those from low-income backgrounds” amid the cost-of-living crisis.
Young people aged 16 or over can take control of their Child Trust Fund, though withdrawals are only allowed from age 18. To locate a lost fund, individuals can contact their provider directly or use the online form on GOV.UK. The government plans to include Child Trust Funds in a communications campaign in 2023 to raise awareness.
