Thousands Of Young People Could Be Missing Out On £2,000 Free Cash – Here’s How To Claim

Young people in the UK could be missing out on around £2,000 in cash sitting in lost Child Trust Fund accounts and are being urged by the Financial Conduct Authority (FCA) to claim their pots.

Some 760,000 Child Trust Fund accounts have now matured, figures from HMRC show and the average unclaimed account holds £2,000.

Child Trust Funds are long-term savings accounts which were set up by the government for around 6.3 million children born between 1 September 2002 and 2 January 2011.

Families received at least £250 and were encouraged to keep paying into the account.

The Child Trust Fund scheme closed in 2011, when the Junior ISA was introduced. Existing Child Trust Fund accounts will continue to mature until 2029 as the owners turn 18.

The FCA is launching a review into Child Trust Funds, including whether providers are giving customers fair value and if there are any barriers to vulnerable adults accessing their money.

Claiming a Child Trust Fund

You can use HMRC’s free Child Trust Fund finder to track down a lost Child Trust Fund if you don’t know your account provider.

If you’re aged 16 or over, you’ll need to supply your National Insurance number.

Parents or guardians looking for a Child Trust Fund account will need to provide:

• the child’s full name, address and date of birth
• any previous names you or the child have used

HMRC will send a letter with details of the Child Trust Fund provider within 3 weeks of getting your request if you apply online. It might take a bit longer if you apply by post.

Once you have the details of the account, you can contact the provider to find out the balance and decide whether to keep contributing, transfer it to a junior ISA or cash it out if you’re 18.

Are Child Trust Funds worth it?

Before the age of 18, can keep adding up to £9,000 a year into an existing Child Trust Fund account and there’s no tax to pay on the income of profit it makes.

You can’t have both a Child Trust Fund and a Junior ISA, however, you can ask the provider to transfer the Child Trust Fund into it.

Transferring a Child Trust Fund into a Junior ISA won’t necessarily be the right choice for everyone. So it’s important to compare the benefits available from both accounts.

If you need more support understanding your options, speaking with an independent financial advisor could help you find the best solution for your financial circumstances and aspirations.

What can you do once the money matures?

Once a Child Trust Fund matures, you can transfer the money into an adult bank account, savings account or ISA.

Whatever your plans are for the windfall, it’s important to try and earn the best return and make the cash work for you.

Some of the best cash savings accounts are paying up to 8%, while the top Cash ISA accounts, which allow you to save up to £20,000 tax-free per tax year, offer inflation-beating rates of 4.56%.

Although bear in mind that from April 2027 this allowance is falling to £12,000 for under 65s from April 2027.

If you don’t need to access your Child Trust Fund lump sum for a few years, investing using a Stocks and Shares ISA could offer the opportunity to grow wealth.

With investing the capital, which is the money you put in, could rise or fall in value and you might not get back as much as you put in.