Hundreds of thousands of people could be sitting on more than £2,000 in forgotten bank accounts, HMRC has warned.
A staggering £1.4billion belonging to 671,000 young people is waiting to be claimed from Child Trust Funds, according to the government.
These are tax-free savings accounts that were set up by the Government for children born between September 2002 and January 2011.
But many young people don’t know these accounts exist or that they can access the money.
In a post on X, HMRC wrote: “Attention parents! If your child has recently turned 18, they may have a #ChildTrustFund, worth an average of £2,200.”
You can check for Child Trust Funds on the HMRC website at gov.uk/child-trust-funds/find-a-child-trust-fund.
You’ll to be over 16, or be a parent, to use the service.
To check for your child, you’ll need their full name, address, and date of birth.
To check for yourself, you’ll need your name, address, date of birth, and National Insurance number.
The tool will tell you which provider holds the Child Trust Fund, but it won’t show how much money is in the account.
Once you’ve filled in the form, HMRC will send you a letter with the details.
If you apply online, you should get this within three weeks, while postal applications may take a bit longer.
What are Child Trust Funds?
CHILD Trust Funds are tax-free savings accounts that were set up by the Government for children born between September 2002 and January 2011.
The Government paid £250 into each account, or £500 for children from low-income families.
Another payment was made when the child turned seven, depending on their family’s financial situation.
In 2010, payments were reduced to £50 for well-off families and £100 for lower-income households.
The scheme was scrapped in 2011 and replaced by Junior ISAs.
Many parents stopped adding money to the accounts, and they were forgotten.
The funds are held by banks, building societies, and other savings providers – not by the Government.
Young people can take control of their account at 16 but can only withdraw the money when they turn 18.
If you don’t hear back within six weeks, you should write to HMRC to follow up.
Once you know who the provider is, you can contact them to withdraw or transfer the money.
You can ask them to transfer it directly into your bank account by providing your bank details.
If you’d rather invest the money, you can transfer it into an ISA for tax-free savings.
However, If you transfer money from a Child Trust Fund into an adult ISA when it matures, it won’t count towards your £20,000 annual ISA limit for over-18s.
For those under 18, it’s often better to move the money into a Junior ISA.
Junior ISAs usually have lower fees and more investment options, according to AJ Bell.
The money will stay locked until you turn 18, but you’ll still get the tax-free benefits of an ISA.
You can transfer the full amount from the Child Trust Fund into a Junior ISA and still add up to £9,000 more in the same tax year.
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