Thousands of Brits could be eligible for a welcome payout, thanks to a government-backed scheme many don’t know about.
The brainchild of former Prime Minister Gordon Brown, Child Trust Funds (CTFs) were designed to give families a helping hand with building a nest egg for their children and promote good savings habits from a young age.
More than six million CTFs were issued, with an average value of around £2,000 each.
The main problem however, is that 728,000 account holders are unaware of their existence.
Since the programme ended in 2011, a total of £1.4 billion has remained unclaimed, the majority of which comes from low income recipients who are owed roughly £2,900 on average.
Could you be entitled to some of that lost or forgotten cash? Here’s everything you need to know.
What is a Child Trust Fund and who has one?
A Child Trust Fund is a special savings account for those born in the UK between September 1, 2002 and January 2, 2011 whose parents were on Child Benefit.
As part of the scheme, the government put £250-£500 into long-term, tax-free savings accounts for each child at birth, but some got a further £250-£500 when they turned seven.
While families and carers received vouchers to set up an account shortly after they had a baby, if they didn’t claim within a year, the government allocated one automatically. That means if you’re currently aged 14 to 22, you could have a CTF.
Parents or guardians have control of this money – held at various banks, building societies or other savings providers – and can deposit additional funds until the child turns 16.
Then, at 18, young people are able to take the cash out themselves or transfer the total into an adult ISA.
How to claim
If you think you might have a CTF, the first step is to ask your parent or guardian whether they know which provider the account is with.
Don’t worry if they’ve forgotten, as you you can also find out via this free tool from HMRC – all you need is your National Insurance number and adoption details if they apply.
You’ll then receive a letter (usually within three weeks) with details of your account when it was opened, and can contact the provider for further information, including the amount you have saved up and what you need to do next.
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Alternatively, you can go through the Share Foundation to trace a lost CTF. This free service can be especially useful if your account was moved to a different provider after being opened, and the charity also allows you to track the process of the application as well as offering financial awareness tips throughout.
Martin Lewis previously warned against companies trying to charge young people to find their Child Trust Fund for them.
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‘Don’t touch them, don’t sniff them, don’t smell them, don’t go near them,’ he said on a video posted on the MoneySavingExpert YouTube. ‘This is easy to do yourself.’
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