Martin Lewis is urging young Brits born between specific years to check for a potential £2,200 payout from HMRC. In the coming weeks, thousands of 21-year-olds will receive letters about their Child Trust Fund (CTF) accounts, which many have forgotten about. The Money Saving Expert (MSE) founder warns that over 750,000 CTFs remain unclaimed, representing millions of pounds in unclaimed cash.
What is a Child Trust Fund?
The Child Trust Fund was a government-backed savings scheme introduced for children born between September 1, 2002, and January 2, 2011. Each eligible child received an initial £250 from the government, with an additional £250 added when they turned seven. Lower-income families received £500 payments. Parents could also contribute up to £9,000. The accounts are tax-free and can grow significantly depending on investment choices. HMRC estimates the average account is worth around £2,240, though actual amounts vary by age, investment type, and additional contributions.
Who is Eligible?
If you were born between September 1, 2002, and January 2, 2011, you are eligible for a Child Trust Fund. This means you are currently aged between 15 and 23. You can take control of the account at 16, but withdrawals are only allowed from age 18. The account is tax-free and does not affect benefits or tax credits.
How to Claim Your Money
To find your Child Trust Fund, you can contact HMRC online or by post. You will need your National Insurance number and date of birth. HMRC will respond within three weeks. Martin Lewis warns against using paid services to locate your account, as this is a free process. He also advises caution regarding scams: letters are legitimate, but you should independently verify provider details.
What to Do with the Money
Once you claim your CTF, consider moving the funds to a higher-interest account. For those under 18, a Junior ISA may offer better rates. For adults, options include adult ISAs, LISAs, or other savings accounts. If you have high-interest debt, paying it off should be a priority. Lewis notes that CTF savings rates are poor because the accounts are no longer active.
For more information, visit the government's Child Trust Fund website. Follow Metro across social media for updates.
