More than 728,000 individuals across the United Kingdom are missing out on an average of £2,240 each from forgotten Child Trust Fund (CTF) accounts, according to recent estimates. Many of these recipients have lost track of their accounts or are simply unaware of their eligibility.
What Is the Child Trust Fund?
The Child Trust Fund was a government-backed savings scheme that ran from 2002 to 2011. Every eligible child received a tax-free savings or investment account with an initial deposit of £250 from the government, with an additional £250 added when the child turned seven. Families on lower incomes received £500 payments. Parents could also contribute up to £9,000, allowing the funds to grow over time. The money becomes accessible when the child turns 18, but many of the 6.3 million recipients have since misplaced paperwork or forgotten about the accounts entirely.
Who Is Eligible?
If you were born between September 1, 2002, and January 2, 2011, you are eligible for a Child Trust Fund account. You can take control of the account at age 16, but withdrawals are only permitted from age 18. The account is tax-free and does not affect benefits or tax credits. However, children who lack mental capacity due to disability or injury face difficulties accessing their funds without a costly process.
How to Claim Your Money
Claiming your CTF cash is free and straightforward. You can contact HMRC online or by post to locate your account. You will need your National Insurance number and date of birth. HMRC typically responds within three weeks. Martin Lewis has warned against third-party firms that charge fees for this service, stating, "Don't touch them, don't sniff them, don't smell them, don't go near them. This is easy to do yourself."
Steps to Follow
- Gather your National Insurance number and date of birth.
- Visit the government's Child Trust Fund page or request details by post.
- Submit your information and wait for HMRC's response (up to three weeks).
- Once you have the account details, contact the provider to access your funds.
What to Do With the Money
Once you receive your CTF payout, consider moving the funds to an account with better returns. Martin Lewis notes that CTF savings rates are often poor. Options include transferring to a Junior ISA for younger account holders or an adult cash ISA for those 18 and over. If you have expensive debt, paying it off should take priority. Always compare alternatives like a Lifetime ISA or traditional savings account to maximize your money.
