HM Revenue and Customs has issued a reminder to people born between 2002 and 2011 to check whether they have money sitting unclaimed in a Child Trust Fund. According to HMRC, the average amount held in these accounts is around £2,200, with some worth considerably more depending on contributions and investment growth.
Background
The Child Trust Fund scheme was introduced in 2005 by the then Labour government. It applied to children born from September 2002 onwards and was designed to give young people a financial starting point in adulthood.
Under the scheme, the government paid an initial £250 into a tax-free savings account during a child’s first year. A further £250 was added when the child turned seven. For children from lower-income families, these payments were doubled to £500 at each stage.
Family and friends were also allowed to contribute to the accounts over time, which means balances vary widely today.
Eligibility
The scheme was gradually reduced and then closed in 2011. As a result, anyone born between September 2002 and 2011 was eligible for a Child Trust Fund account.
HMRC has stressed that many young adults are unaware they have one. In a recent post, the department said people in this age group could have money “waiting” for them and encouraged them to check as soon as they turn 18.
Value
HMRC estimates the average Child Trust Fund is now worth about £2,200. Some accounts hold less, while others may be worth several thousand pounds, particularly where families made regular contributions or where funds were invested.
The money belongs to the child and cannot be accessed by parents or guardians once the account holder turns 18, unless special legal arrangements are in place.
Access
If you know which provider holds your Child Trust Fund, you can contact them directly to claim or manage the account. If you do not know where it is held, HMRC can help trace it.
To ask HMRC to find a Child Trust Fund, you will need your National Insurance number. If the account relates to adoption, additional details may also be required.
Parents or guardians searching on behalf of a child will need to provide the child’s full name, address, date of birth, and any previous names used. Including the child’s National Insurance number can help speed up the process. The online form must be completed in one session, as it cannot be saved and returned to later.
Maturity
When a Child Trust Fund matures on the account holder’s 18th birthday, control of the account automatically transfers to them. No further money can be added at that point.
The young person can choose to withdraw the funds or transfer them into an adult ISA. If no action is taken, the money remains in the account, but no one else can access it.
If the account holder lacks the mental capacity to manage their finances at age 18, a parent, close friend, or relative must apply for a financial deputyship. In England and Wales, this is done through the Court of Protection. Separate arrangements apply in Scotland and Northern Ireland.
Options
Although the Child Trust Fund scheme has closed, it is still possible to transfer an existing fund into a Junior ISA. However, a person cannot hold both at the same time. If a Junior ISA is opened, the provider can arrange the transfer from the Child Trust Fund.
Up to £9,000 a year can still be added to an existing Child Trust Fund until it matures.
FAQs
Who might have a Child Trust Fund?
People born between September 2002 and 2011 may have one.
How much is the average Child Trust Fund worth?
HMRC says the average balance is around £2,200.
When can a Child Trust Fund be accessed?
The money can be accessed when the account holder turns 18.
How do I find my Child Trust Fund?
You can ask HMRC to trace it using your details.
