City thinking, local knowledge

£1.4 Billion in Forgotten Child Trust Fund Money. Could Some of it be Yours?

By Questa

Did you know there could be a tidy sum of money just waiting to be claimed for a young adult in your family? The government has revealed that a staggering £1.4 billion is sitting unclaimed in Child Trust Funds (CTFs), accounts that were set up for children born between 1 September 2002 and 2 January 2011. But why has so much money been forgotten, and what can you do if you think your child might have a stake in the forgotten child trust fund millions?

What Are Child Trust Funds?

If you’re scratching your head trying to remember what a Child Trust Fund is, you’re not alone. CTFs were a scheme introduced by the UK government to encourage long-term savings for children. Parents of children born during the eligible period were given a voucher – either £250 or £500, depending on circumstances – to kick-start the fund. Parents could add to it over the years, but if they didn’t act within 12 months of receiving the voucher, the government would automatically open a CTF on the child’s behalf.

Once set up, the money was locked away, growing over time with interest or investment returns, depending on the type of CTF chosen. The idea was that once the child turned 18, they could access the money, withdraw it, or transfer it to an adult ISA. But it seems not everyone has done so.

Why Is There So Much Unclaimed?

More than a quarter of these forgotten child trust fund accounts – about 25% – were opened automatically by the government because parents didn’t use their vouchers. As a result, many families might not even realise these accounts exist. Some parents might have forgotten about the initial setup, and now that their children have turned 18, the funds are lying dormant.

The figures suggest that there are thousands of young adults who could be sitting on a small windfall without knowing it. With accounts maturing every day, the total value of unclaimed CTFs could increase even further unless action is taken.

How Can You Find Out If There’s Money Waiting?

If you think your child or someone you know could have a CTF, the good news is that it’s relatively easy to track down. The government has an online tool that helps locate these forgotten accounts. All you need is some basic information, such as the child’s National Insurance number, and you could be on your way to reclaiming a forgotten pot of money.

Click here to Use the Government’s CTF Tool Here

Simply enter the required details, and the tool will guide you through the process of finding the account. Once located, you can decide what to do with the money. Many young adults are choosing to transfer their CTFs into an adult ISA, allowing them to continue growing tax-free.

What Should You Do Next?

If you’ve tracked down a CTF, there are a few options available:

  1. Withdraw the Money: The child can access the funds as soon as they turn 18. Whether it’s used for university costs, driving lessons, or just a bit of spending money, it’s a handy resource that many young adults may not realise they have.
  2. Transfer to an Adult ISA: If the money isn’t needed immediately, transferring it to an adult ISA could be a smart move. This allows the savings to keep growing without being taxed on interest or investment returns.
  3. Transfer to a Junior ISA (if under 18): If you’ve discovered a CTF for a child who’s still under 18, you might consider transferring it into a Junior ISA. Junior ISAs generally offer better investment options and lower fees than older CTFs, so making the switch could mean better returns by the time the child reaches adulthood.

What Does This Mean for Families?

For families, finding one of these forgotten accounts could be a pleasant surprise, especially in today’s economic climate. Even if the original voucher amount wasn’t added to, an untouched CTF could still have accumulated a reasonable amount due to interest or investment growth over the years.

With the cost of living rising, every little helps, and these funds could make a meaningful difference to a young person’s financial future. Whether it’s supporting further education, contributing to a deposit for a first home, or just offering a bit of financial independence, these CTFs shouldn’t be left to gather dust.

Don’t Leave Money on the Table

Given the size of the unclaimed pot – £1.4 billion – it’s clear that there are still many families who aren’t aware they could be missing out. If your child was born between September 2002 and January 2011 and you don’t remember setting up a CTF yourself, it’s worth taking a few minutes to see if the government did it for you.

It’s quick, easy, and could unlock forgotten child trust fund riches that might come in handy as young people take their first steps into adulthood. So why not have a look? You might just find a forgotten treasure that’s been growing all these years.

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