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Is your teenager missing out on a stash of cash?

Emma Lunn
Written By:
Emma Lunn

Teenagers could have an average of £2,100 in their Child Trust Fund waiting to be claimed.

Tens of thousands of teenagers in the UK who have not yet claimed their matured Child Trust Funds savings could be missing out on thousands of pounds, according to HMRC.

Child Trust Funds are long-term savings accounts set up for every child born between 1 September 2002 and 2 January 2011. To encourage future saving and start the account, the government provided an initial deposit of at least £250.

An estimated 6.3 million Child Trust Fund accounts were set up throughout the duration of the scheme, containing about £9bn. If a parent or guardian was not able to set up an account for their child, HMRC opened a savings account on the child’s behalf.

The savings accounts mature when the child turns 18-years-old. Eligible teenagers, who are aged 18 or over and have yet to access their Child Trust Fund account, could have savings waiting for them worth an average of £2,100.

Tracking down your Child Trust Fund

If teenagers or their parents and guardians already know who their Child Trust Fund provider is, they can contact it directly. This might be a bank, building society or other savings provider.

Myron Jobson, senior personal finance analyst at interactive investor, said: “Many teenagers might not be aware that there is a cash pot in their name waiting to be claimed as 1.8 million of the around 6.3 million Child Trust Fund accounts set up throughout the duration of the scheme were done so by HMRC, where parents or guardians did not open an account.

“Many others have been forgotten along the way as Junior ISAs took centre stage. The fact that the majority of Child Trust Fund subscriptions were in the £1 to £249 band and around 4.6 million received no subscription in the 2020/21 tax year, the latest available figures, fuel concerns that accounts have been forgotten about or lost.

“For the youngest holders, there are still eight years before their Child Trust Fund reaches maturity. If you hold a Child Trust Fund for your child, it is worth considering transferring to a Junior ISA. It is a no brainer in most instances as Junior ISAs tend to have better rates on cash savings, more investment options and lower charges.”

A ‘financial boost’

Many eligible teenagers who have yet to claim their savings might be starting university, apprenticeships or their first job. The lump-sum amount could offer a financial boost at a time when they need it most.

Angela MacDonald, HMRC’s second permanent secretary and deputy chief executive, said: “Teenagers could have a pot of money waiting for them worth thousands of pounds and not even realise it. We want to help you access your savings and the money you’re entitled to.”

Teenagers aged 16 or over can take control of their own Child Trust Fund if they wish, although the funds can only be withdrawn once they turn 18-years-old.

The account matures once the child turns 18 and no further money can be deposited. The child can either withdraw the funds from the matured Child Trust Fund account or reinvest it into another savings account.

The Child Trust Fund scheme closed in January 2011 and was replaced by the Junior ISA.