HMRC has issued an update on the 750,000 people who could be entitled to a £2,200 payout from unclaimed Child Trust Funds (CTFs). The government revealed that more than £1.6bn worth of unclaimed money is held in CTFs, which HMRC aims to return to rightful owners.
Background on Child Trust Funds
Around 6.3 million CTF accounts were opened for children born between 1 September 2002 and 2 January 2011, predominantly by parents and guardians, with the remainder established by HMRC. These accounts have now begun to mature as account holders turn 18, but many remain unclaimed.
Last month, Economic Secretary to the Treasury Rachel Blake MP created a new Child Trust Fund Taskforce, bringing together CTF providers and the government to help reunite people with their money.
Parliamentary Questions and Government Response
In a written parliamentary question, Liberal Democrat MP for North Devon Ian Roome asked the Chancellor about steps being taken to trace owners of unclaimed CTFs and the potential merits of an automatic release process using National Insurance numbers.
In response, Treasury Secretary Rachel Blake stated it is 'vital to step up efforts to reunite young people with their unclaimed CTFs'. She noted: 'Around three million accounts have now matured, of which over three quarters of a million remain unclaimed.'
Three New Initiatives
Blake outlined three new initiatives. First, HMRC is carrying out social research to understand barriers preventing young people from engaging with their CTFs. Second, HMRC is writing directly to 21-year-olds whose matured CTFs remain unclaimed, making them aware and encouraging them to claim. Third, the government has launched a dedicated CTF Taskforce to improve tracing and engagement.
Regarding automatic release, the government stated it does not have authority to access or transfer these funds, as they belong to individual account holders and are held by private providers. Neither the government nor providers hold bank account information for CTF owners.
