HMRC Urges Thousands to Claim £2,200 Child Trust Fund Windfall
HMRC is issuing a critical alert to thousands of UK households, revealing that individuals born between 2002 and 2011 may have substantial funds "waiting" for them through the Child Trust Fund initiative. The tax authority emphasizes that this potential windfall could average around £2,200 per account, urging immediate action to check eligibility and claim the money.
What Is the Child Trust Fund Programme?
The Child Trust Fund programme was launched by the Labour Party government in 2005, specifically designed for children born from September 2002 onwards. This tax-free savings scheme provided an initial government deposit of £250 into each account during the child's first year, with an additional £250 added when they reached seven years of age. For families on lower incomes, the deposit was increased to £500 to support financial inclusion.
The programme was abolished in 2011, meaning that anyone born during the 2002 to 2011 period qualified for these accounts. Now, HMRC is actively encouraging people to investigate their eligibility, as many may have overlooked this financial asset.
How to Check and Access Your Funds
In a recent social media post on X, HMRC directly addressed potential claimants: "Born between 2002 and 2011? You could have money waiting for you. You may have a Child Trust Fund, which can be cashed in as soon as you turn 18. Check if you have one." The typical balance in these accounts is reported to be £2,200, offering a significant financial boost for young adults.
To access the funds, individuals should follow these steps:
- Contact your Child Trust Fund provider directly if you know who holds the account.
- If unsure, ask HMRC to locate the provider, as they can identify where the account was originally opened.
- Note that the money belongs to the child and can only be withdrawn when they turn 18, with control of the account available from age 16.
Important Considerations and Alternatives
Since the Child Trust Fund scheme closed in 2011, the Government's official website advises that applicants can now apply for a Junior ISA instead. However, it is crucial to understand that you cannot have both a Child Trust Fund and a Junior ISA simultaneously. If you choose to open a Junior ISA, you must request the provider to transfer the trust fund into it to consolidate savings.
For those with existing Child Trust Fund accounts, contributions of up to £9,000 per year can still be added, making it a viable ongoing savings option. This initiative highlights the importance of financial awareness and proactive management of government-backed savings programmes.
HMRC's alert serves as a timely reminder for families and young adults to review their financial records and ensure no funds are left unclaimed. With thousands potentially affected, this call to action could unlock millions in dormant savings across the UK.
