Child Trust Funds (CTFs) were introduced by the UK Government to encourage long-term savings for children born between 2002 and 2011. However, many of these accounts remain unclaimed, leaving substantial amounts of money sitting idle.
According to a report from Daily Record, over 750,000 young adults have yet to access their CTFs, with funds often being left untouched as account holders are either unaware of their existence or unsure how to claim them. This situation raises questions about the future of these savings and the potential solutions for improving access to these funds.
Unlocking Child Trust Funds for Young Adults
More than 750,000 young adults in the UK are currently unaware they could access Child Trust Fund (CTF) accounts, each worth around £2,242, according to new figures released by HM Revenue and Customs (HMRC). These funds, which were set up with public money to support long-term financial health, remain unclaimed and dormant in banks and savings institutions.
As calls grow for the UK Government to authorize automatic disbursement of these funds at age 21, charities and policymakers argue that access to this money could significantly support low-income young adults entering adulthood.
Unclaimed Funds Totaling Millions Still Locked Away
Recent data highlights that 758,000 young people aged between 18 and 23 have yet to claim their matured CTFs. The accounts were created for children born between September 1, 2002, and January 2, 2011, with an initial government deposit of at least £250. Despite reaching maturity at age 18, a large portion of the account holders have never withdrawn or reinvested their funds.
In Scotland, more than 27,000 accounts are still untouched, representing approximately £34 million in savings, two-thirds of which could benefit young people from disadvantaged backgrounds. The accounts are not government-held but managed by banks, building societies, and other private financial providers, making the tracking process more complex for many families.
The issue, advocates argue, is not just about access but also about awareness. Many young adults are unaware that these funds exist in their name. In response, The Share Foundation—a charity managing the government scheme for youth in care—has helped 85,000 individuals recover more than £165 million in unclaimed CTFs.
Charity Proposes Automatic Release Via National Insurance Channels
To resolve the issue, The Share Foundation has formally proposed a solution: automatically releasing unclaimed, HMRC-allocated CTFs to their rightful owners at age 21. This proposal is backed by former Minister Ruth Kelly and multiple parliamentarians across party lines. The plan suggests that financial providers would be compelled to close unclaimed accounts and transfer the proceeds through National Insurance channels directly to the beneficiary.
This bi-cameral support from parliamentarians gives political weight to the call for reform. According to Gavin Oldham OBE, Chair of Trustees at The Share Foundation,
Child poverty remains a growing challenge across Scotland. Over the past 12 years, we’ve worked to tackle cycles of disadvantage by establishing starter capital accounts for young people in care and by helping those from low-income households access Child Trust Funds many didn’t even know existed. While there’s much more still to do, these steps offer a foundation of support at a time these families need it the most.
A Growing Need For Accessible Youth Finance
The CTF initiative was discontinued in 2011 and replaced by Junior Individual Savings Accounts (JISAs). However, its legacy still carries significant potential impact. Eligible youth can take control of their account at 16, though the funds become fully accessible at 18.
What’s important to note is that up until the age of 18, families can still contribute up to £9,000 annually to a Child Trust Fund, allowing it to grow significantly over time. This provision was particularly valuable for those whose families continued to contribute regularly to the account.
For those unaware of their provider, HMRC offers a free online tracing service via GOV.UK. This requires a National Insurance number and a Government Gateway account. For those unable to complete the process online, a postal request option is available. The Share Foundation also runs its own search service and is able to locate most accounts within 24 hours.
