Hundreds of thousands of young people aged between 18 and 22 in the UK may have unclaimed savings accounts worth an average of £2,200, according to the tax authority HMRC.
These funds, described as hidden payments, are held in Child Trust Funds (CTFs), a government initiative launched under the Labour administration to encourage financial responsibility among children.
According to a recent report by the Birmingham Mail, millions of pounds remain unclaimed in these accounts.
HMRC has confirmed that many eligible young adults are unaware of their entitlement and has issued reminders urging them to check their accounts and claim their funds.
Origins and Details of the Child Trust Fund Scheme
The Child Trust Fund program was launched in 2002 and automatically opened a tax-free savings account for every child born between September 1, 2002, and January 2, 2011. The government made an initial deposit of £250 into each account.
Children from lower-income households received a higher starting amount of £500. In some cases, additional top-ups were made throughout the child’s upbringing to increase savings.
Although the scheme ended in 2011, the funds remain invested, often earning interest, and become accessible once the account holder reaches 18 years old.
At that point, the account automatically transfers into an adult individual savings account (ISA) unless the account holder takes action to claim or manage the funds.
Current Status and Unclaimed Funds
Many young adults are unaware that their Child Trust Fund accounts exist or that they can access the money.
HMRC has confirmed that thousands of CTF accounts remain unclaimed, with millions of pounds sitting dormant in accounts held by banks or building societies. The average amount per account is approximately £2,200.
HMRC has issued a recent alert, stating:
Thousands of Child Trust Fund accounts are sitting unclaimed. We want to reunite young people with their money and we’re making the process as simple as possible.
They added,
If you’re over the age of 18 and have not claimed your #ChildTrustFund, then you may be eligible to cash it in. The average amount claimed is £2,200.
How to Claim Your Child Trust Fund
HMRC encourages all eligible young people to check for unclaimed Child Trust Funds using the official government website. They emphasize that there is no need to pay third parties or intermediaries to locate these accounts. As HMRC advises,
You don’t need to pay anyone to find your Child Trust Fund for you, locate yours today by searching ‘find your Child Trust Fund’ on GOV.UK.
The process has been designed to be straightforward, allowing account holders to claim or transfer their funds with minimal complication.
Implications of Unclaimed Savings
Millions of pounds in unclaimed savings highlight a broader issue of awareness among young adults regarding government savings programs. The Child Trust Fund was introduced as a long-term savings vehicle to encourage financial responsibility from an early age.
Now, as the first generation of beneficiaries reaches adulthood, the unclaimed balances represent a significant, though often overlooked, financial resource.
The accounts remain held in banks or building societies, which means the funds are secure and continue to accumulate interest or investment returns until claimed.
