HM Revenue and Customs (HMRC) is launching a fresh call to action, urging hundreds of thousands of young adults across the UK to unlock a significant financial windfall. The government body estimates that a staggering 758,000 people have yet to claim money that is rightfully theirs, with the average unclaimed sum sitting at approximately £2,212.
What Is The Child Trust Fund?
This potential cash boost originates from the Child Trust Fund (CTF), a savings and investment scheme introduced by the Labour government back in 2005. The initiative was designed to kick-start a savings habit for the younger generation.
Under the scheme, the Government made an initial contribution to an account for every child born between September 1, 2002, and January 2, 2011. The opening deposit was either £250 or £500, with the higher amount typically going to children from lower-income families.
Parents and guardians were then able to add their own money to these accounts, with the total growing as a long-term, tax-free savings pot. A key rule of the scheme was that no withdrawals could be made until the child celebrated their 18th birthday.
How To Claim Your Money Now
With the first cohorts of these children now well into adulthood, a vast number of these accounts remain untouched. The funds are still safely held with various banks, building societies, and savings providers, but they require action from the individual to access.
The simplest way to locate a forgotten Child Trust Fund is by using the dedicated online service on the Gov.uk website. After submitting an enquiry through this tool, HMRC will send a letter to the applicant's address containing the details of their CTF provider. This process usually takes up to three weeks.
If you do not receive a reply within six weeks, the next step is to write a formal letter to HMRC, including any reference number you may have from your initial enquiry.
Key Facts About Your Child Trust Fund
It is important to understand the rules governing these accounts. While the money belongs to the child, they can only legally withdraw the funds once they turn 18. However, they are permitted to take control of the account and manage its investments from the age of 16.
For parents, the opportunity to continue supporting their child's savings remains. It is still possible to add up to £9,000 per year into an existing Child Trust Fund account. Crucially, the money within the CTF is completely tax-free, meaning there is no tax to pay on any income or profit it generates, and holding a CTF does not affect eligibility for any state benefits.
