HMRC is encouraging individuals born between two specific dates to check if they qualify for up to £2,000 in free money through the Child Trust Fund (CTF). The government has issued a reminder to prompt people to verify if they have an unclaimed CTF.
HMRC Urges Eligible Individuals to Claim Forgotten Child Trust Funds
CTFs are special tax-free savings accounts that the government provides to children.
Many children received approximately £250 from the state when their CTF was initiated.
Those from low-income households or in local government care earned an additional £250.
These bank accounts are now worth roughly £2,000 on average, thanks to the money they have earned.
To have been granted a CTF, the recipient must have been born between September 1, 2002, and January 2, 2011.
According to the most recent data, about 430,000 18- to 21-year-olds had unclaimed CTFs worth an average of £2,000 each.
HMRC took to X, now known as Twitter, and urged anyone who might have one of the accounts to verify.
It stated, “Were you born between September 1, 2002 and January 2, 2011?
“Check if you have forgotten savings in a Child Trust Fund—worth around £2,000 on average.”
The funds are held until the child turns 18, and the first cohort obtained access in September 2020.
How to Locate a Lost Account?
If you happen to be one of the tens of thousands of young adults who have not claimed your account, the government has an online monitoring service that will tell you if you have one and which provider it is with.
To learn more, you will need a government portal login and a National Insurance number.
If you are a parent wishing to find out about your child's fund, you can do so online or by sending a letter to HMRC with the following information:
- Full name and address.
- Child's full name and address
- Child's birth date.
- Child's National Insurance number or Unique Reference Number, if known.
What occurs once I've claimed the money?
Once you've withdrawn money from a matured trust fund, there are a few alternatives to consider.
Typically, people deposit money directly into a bank account, invest it, or transfer it into an ISA.
You can request that your CTF provider cash the money into your account.
You'll need to disclose the bank account details you want to transfer the funds into with HMRC, which you won't be able to do until you're 18.
If you'd rather to invest it, you can do so by transferring it to an ISA.
A cash ISA normally has lower interest rates than a conventional savings account; however, a Lifetime ISA may be more suitable if you intend to save for your first house.
If you choose a Lifetime ISA, you can add £4,000 to your account each year, and the government will give you a 25% bonus if you use it to buy your first house.
You might as well wait until retirement before using the funds.
Keep in mind that you do not pay taxes on the interest you gain in these accounts.