Huge leap in teen awareness of Child Trust Funds
Nearly three in five (59 per cent) 16–17-year-olds know about CTF pay-outs, compared to just 38 per cent a year ago, a survey by Orbis Investments found.
CTFs were a government scheme available to all children born between 1 September 2002 and 2 January 2011.
Under the scheme, parents or guardians were given vouchers to set up accounts with Child Trust Fund providers, which were usually banks, building societies or investment managers.
If an account was not opened by the child’s parent, HMRC set one up on the child’s behalf.
When they turn 18, recipients can take a cash lump sum or roll the money it into a traditional stocks and shares or cash ISA. So, last September was the first month teenagers could access their cash.
However, awareness of CTFs has been low in recent years, with hundreds of thousands of teenagers missing out on an average windfall of £1,500 each because they either haven’t claimed their cash or don’t know they have an account.
But in a reversal of last year’s findings, awareness has shot up.
The research shows that of the 16- and 17-year-olds waiting to receive the money on their 18th birthday, 36 per cent were still unsure of what to do with it.
Nearly a third (28 per cent) said that they planned to save the cash, but not in an ISA, while 17 per cent said that they would continue to save in an ISA. Less than 13 per cent were looking to spend it.
Dan Brocklebank, head of Orbis Investments UK, said: “While it is encouraging that awareness of CTF entitlement seems to have risen over the last year, there is still a long way to go – 41 per cent are still unaware of the lump sum amount they will receive.”
Parents or children can track down lost Child Trust Fund amounts at this link: https://www.gov.uk/child-trust-funds/find-a-child-trust-fund