The Labour government has launched a Child Trust Fund Taskforce to help more than 750,000 young adults reclaim forgotten savings worth a combined £1.6 billion. The initiative brings together HMRC officials and account providers to reconnect people with money they may not realise belongs to them.
Background on Child Trust Funds
Roughly 6.3 million Child Trust Funds (CTFs) were opened for children born between 1 September 2002 and 2 January 2011. Most accounts were set up by parents or guardians, but 1.8 million were opened directly by HMRC. The average unclaimed amount per account is £2,200.
Government and industry collaboration
Rachel Blake, economic secretary to the Treasury, said: “Too many young people are missing out simply because they are not aware of where their Child Trust Fund is or how to access it. We are acting to fix that by bringing government and industry together – improving coordination and making it easier for people to find and claim what’s rightfully theirs.”
HM Treasury stated the taskforce will “improve tracing approaches, test more effective engagement with young people, and drive practical actions that lead to more accounts being claimed”.
Industry reaction
Antonia Medlicott, founder and managing director at personal finance website Investing Insiders, welcomed the taskforce but said more should have been done sooner. She added: “Far too many Child Trust Funds are going unclaimed. Some accounts will hold significantly more than the £2,200 average figure that has been circulated, and it’s a shame to see that they have been left until now.”
Sarah Coles, head of personal finance at investment platform AJ Bell, noted: “Of the 6.3 million accounts that were opened, 1.8 million were opened by HMRC, so there’s a decent chance the parents of these children never engaged with where the money ended up. For those who did choose where to put the money, so much time has passed that there’s a real risk they moved house and didn’t update their details, and if the paperwork has gone astray, they may have forgotten these accounts entirely.”
Recommendations for families
Coles explained: “Stocks and Shares CTFs tend to have higher charges and less choice than their equivalent Junior ISAs, while Cash CTFs often pay less interest. It means parents should waste no time in tracking the accounts down and deciding whether to move the money into a Junior ISA.”
