Young people are missing out on more than £1.3billion that is sitting in lost or forgotten accounts set up in their names, new figures reveal. Almost 690,000 young people haven’t claimed their child trust fund (CTF) accounts, according to analysis by charity The Share Foundation.
Londoners are the biggest losers, with almost 100,000 accounts containing some £196million unclaimed. CTFs were set up by the government for children born between September 1, 2002, and January 2, 2011.
They were tax-free accounts containing £250 – or £500 for lower income families – and were designed to give everyone a lump sum to begin their adult life when they turned 18 and to encourage young people to develop a savings habit that would endure throughout their life.
A child’s parents could decide to put the money into a cash account where it it would gain interest, or an investment account. They were able to make additional contributions up to an annual limit (the current allowance is £9,000 a year).
If parents did not open a CTF for their child, it was done by HM Revenue & Customs on the child’s behalf.
Children are permitted to take over management of the accounts when they turn 16 and can access the funds from age 18.
Youngsters are missing out on more than £1.3billion that is sitting in lost or forgotten accounts set up in their names
It is now almost five years since the first cohort of children became eligible to access their accounts, but many don’t know they exist.
A damning 2023 report from the Public Accounts Committee (PAC) says there are many unclaimed accounts because of a ‘failure in long-term planning’ by HM Revenue and Customs.
It also claimed some CTF providers such as banks are not doing enough to proactively reunite owners with their forgotten accounts, while charging fees for passively managing the accounts.
Many of the unclaimed accounts belong to low-income families. Almost one in three of the dormant funds are waiting for low-income young adults, the new data reveals.
In England the unclaimed amount is a staggering £1.125billion while in Scotland it’s £109million. In Wales some £64million is ‘lost’ while in Northern Ireland it is £48million.
Funds are now worth around £2,000 on average as savings interest, investment growth and contributions from parents have boosted the size of pots.
University of Leeds student Tayo Olutunde found more than £2,000 waiting for him when he finally accessed his lost child trust fund account.
The 21-year-old grew up in the UK before moving to Nigeria for eight years and then returned to the UK again in 2019, at the age of 16.
He remembered that when he was a child his mum, who now lives in Nigeria, mentioned a ‘trust fund’.
But it wasn’t until 2023 when Tayo started to see videos on social media about CTFs that he decided to investigate.
He eventually tracked his CTF down to NatWest through a combination of websites, including The Share Foundation. He says: ‘It was more than £2,000 – I was really impressed. I’m glad I found out about what I was owed after I got my first car!’
The accounting and finance student – who is on a placement year working as an analyst in a government department – has invested most of the money, except £200 which he used for a trip to Milan to celebrate his 21st birthday with friends.
‘So many people are unaware they have one,’ he says. ‘We need to push this more. I was lucky I figured it out for myself.’
Just 55 per cent of 18-24-year holds hold a savings product; as many as 85 per cent of those aged 75 and over have one, however
More than one million CTFs for young adults aged at least 21 have matured, the analysis reveals.
To find your CTF if you don’t know the provider, first ask your parents if they have any details.
If they don’t, you can use a service from HMRC. See www.gov.uk/child-trust-funds/find-a-child-trust-fund. You must be at least 16 years old and looking after your own CTF to use the service.
You’ll need your National Insurance number on hand, too. You can also use a similar tool from The Share Foundation. Go to: www.sharefound.org/ctf.
Once you have tracked yours down, you can choose what to do with it. You can withdraw it or transfer it to an adult Isa where it will retain its tax-free wrapper. Anything you transfer will not count towards your annual Isa allowance, which is £20,000 for over 18s.
If you have a CTF but are under the age of 18, you could choose to transfer it to a Junior Isa where the charges are likely to be lower.
Third-party agents advertise services that offer to track down CTFs on your behalf. However, they charge either a flat fee or a percentage of the value of the account. Using such a service still requires you to hand over the same information – and take the same length of time.
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