Thousands of Young Adults Unaware of Unclaimed Child Trust Funds, HMRC Warns

According to HM Revenue and Customs (HMRC), approximately 671,000 young adults between the ages of 18 and 22 are unaware of unclaimed Child Trust Funds (CTFs), with the average account valued at £2,212. These findings have prompted HMRC to remind eligible individuals to claim their funds.

Child Trust Funds were established for children born between September 1, 2002, and January 2, 2011, as a government initiative to provide a financial boost to individuals reaching adulthood. Each eligible child initially received £250 into these long-term, tax-free savings accounts, with additional contributions for children from low-income families or in local authority care.

Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive, highlighted the issue, 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.”

Youth aged 16 and older can take ownership of their accounts, with full access to withdraw funds upon reaching 18 years. However, many remain uninformed about the existence or details of their accounts, which are held across various banks, building societies, and financial institutions.

For those unaware of their CTF provider, HMRC has provided a free online tool accessible on GOV.UK, requiring only the user’s National Insurance number and date of birth. This tool aims to streamline the process without the potential costs associated with third-party agents who often charge fees for locating accounts.

In 2023, over 450,000 young adults utilized the government service to find their Child Trust Fund accounts, highlighting the importance of these resources. Gavin Oldham from The Share Foundation emphasized the potential growth of these investments, noting, “If you are 18-21 years old, the government would have put money aside for you shortly after birth. This investment would have grown quite a bit and it’s in your name. It’s easy and free to find out where your money is.”

HMRC continues to warn against using external services to locate CTFs due to potentially significant fees, sometimes amounting to £350 or a proportion of the fund’s value. The department encourages individuals to take advantage of the free tools available.

Additional information and access to the CTF locator tool can be found on the official GOV.UK website.