Almost 430,000 young people have yet to claim the money in tax-free savings accounts the government set up for them for when they turn 18.
The accounts are called Child Trust Funds and were set up for every child in the UK born between 1 September 2002 and 2 January 2011. The government awarded each account at least £250, to give young people a head start in life, and they’re estimated to be worth an average of £2,000 each now.
During ‘UK Savings Week’ HM Revenue and Customs (HMRC) is urging young people who have turned 18 to claim the cash that is rightfully theirs. A recent UCAS survey of first- and second-year university students revealed that 43% were most interested in knowing how much money was in their account and 32% wanted to know how to claim it.
Young people and parents can search on GOV.UK to find out where their Child Trust Fund account is held.
Angela MacDonald, from HMRC said: “Many 18–21-year-olds are starting out in first jobs or apprenticeships, starting university, or moving into their first home and their Child Trust Fund is a pot of money with their name on.
“I would encourage young people to use the online tool to track it down or, for parents of teenagers, to speak to them to ensure they’re aware of their Child Trust Fund. It could make a real difference to their future plans.”
Sharon Davies, CEO of Young Enterprise, a national charity specialising in enterprise and financial education, said: “A disproportionate amount of the money is unclaimed by young people from disadvantaged backgrounds, who are the very people who would benefit most from these funds. The investment could be placed into an adult ISA or put towards driving lessons, education or starting a business.”
Families are allowed to pay in up to £9,000 a year tax-free into a Child Trust Fund until the account matures when the young person turns 18. The money stays in the account until it’s withdrawn or is reinvested.
More than 500,000 matured Child Trust Fund accounts have been claimed or transferred into an ISA since the oldest children on the scheme turned 18 in September 2020.
You can find out more from HMRC’s video here
