A significant number of individuals, totaling 728,000, have funds deposited in a tax-free savings account that many are unaware of. If you were born in the UK between September 1, 2002, and January 2, 2011, it is probable that you possess a Child Trust Fund (CTF) account.
The government initiated this program to instill a culture of saving in children that would persist into adulthood. Every account was initialized with a minimum of £250 (£500 for children from lower-income households). Even if parents did not establish an account, HMRC would have done so on their behalf. Recent data reveals that £1.4 billion remains unclaimed, with the typical amount in Child Trust Funds estimated to be around £2,000 due to accrued interest and additional contributions from relatives and acquaintances. Calls for automatic pay-outs are gaining momentum, drawing the attention of policymakers.
MP Sir Geoffrey Clifton-Brown voiced support for an automatic pay-out system, likening the unclaimed funds to a hidden treasure awaiting discovery. HMRC acknowledged the complexity of such a scheme, emphasizing the need for thorough legal deliberation to facilitate the closure and transfer of these accounts.
The Share Foundation charity, advocating for automatic payments, has assisted over 50,000 young individuals in locating their funds, amounting to over £100 million.
One such individual, 20-year-old Latonya Skye-Paterson, recently uncovered £955 in a Child Trust Fund that she was unaware of until her college tutor brought it to her attention.
The Child Trust Fund program ceased in 2011; however, those who set up accounts before this date can continue to contribute up to £9,000 annually. The funds are the property of the child and can only be accessed upon turning 18. Control of the account can be assumed at 16, with no tax implications on the income or profits generated. It will not affect any existing benefits or tax credits.
To identify your Child Trust Fund provider, reach out to them directly if known. Alternatively, consult your parents or guardians for assistance in locating the account swiftly. HM Revenue and Customs (HMRC) can also aid in identifying the provider by disclosing the original account opening location.
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