HM Revenue and Customs (HMRC) has recently issued a statement urging people born between 1 September 2002 and 2 January 2011 to check for unclaimed assets in dormant accounts.
This follows the awareness that a significant number of Child Trust Fund (CTF) beneficiaries may have forgotten about their deposits.
What Is Child Trust Fund?
Child Trust Funds (CTFs) are government-backed savings schemes for children born between specific dates. The idea was that every child should have savings by the age of 18, regardless of the wealth of their family.
At first, the government paid a deposit of £250 into each account, after which parents, family or friends could make additional contributions of up to £9,000 a year.
The CTF programme worked simply and effectively. Funds were tax-free, and accumulated income and profits did not affect eligibility for benefits or tax credits. The child owned the deposits, but withdrawals could only be made at the age of 18, or controlled at 16.
Once the child has reached the age of 18, no further contributions are permitted, but the balance can be transferred to an Individual Savings Account (ISA) for adults.
In 2011, the Children's Trust Fund programme was terminated. However, the existing accounts continued to grow thanks to interest and returns on investments. Unfortunately, some of these funds have been forgotten and now lie dormant in the accounts.
HMRC estimates that nearly 430,000 people aged between 18 and 21 still have unclaimed balances of around £2,000 each. This includes assets held in the Child Trust Fund, of which the owners may not be aware.
Many 18-21-year-olds are starting out in first jobs or apprenticeships, starting university or moving into their first home and their Child Trust Fund is a pot of money with their name on. I would encourage young people to use the online tool to track it down or, for parents of teenagers, to speak to them to ensure they’re aware of their Child Trust Fund. It could make a real difference to their future plans.
Overall, the amount of unclaimed funds is considerable and could go a long way to supporting the education or other financial needs of beneficiaries.
Were you born between 1 Sep 2002 and 2 Jan 2011?
💷 Check if you have forgotten savings in a Child Trust Fund – worth around £2,000 on average (T&Cs apply).
💷 Claiming your Child Trust Fund is simple.
💷 Find out how to do it yourself and keep every penny ⬇️
— HM Revenue & Customs (@HMRCgovuk) April 18, 2024
Contacting HMRC to Claim the Lost Child Trust Fund
If you were born between 1 September 2002 and 2 January 2011, it's worth checking whether you have a dormant Child Trust Fund. An online tool has been made available by HMRC to help locate forgotten Child Trust Funds.
To use this tool, people need a National Insurance number. Parents or guardians searching on behalf of their child need the child's full name, address, date of birth and any other names previously used.
For those unsure of their account provider, HMRC can help determine the originating financial institution. A letter containing the details of the account provider will be sent by HM Revenue and Customs within three weeks of the request.
If no response is received within this period, those concerned must follow up in writing, including any reference number. Please refer to this link, HMRC Child Trust Fund, for more information.