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Teenagers urged to track down Child Trust Fund accounts

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Written by: Emma Lunn
03/09/2019
Child Trust Funds come of age in 12 months’ time but many young people will be unaware of an account in their name.

The beginning of September marks one year until the first generation to hold Child Trust Funds (CTFs) turn 18 and gain access to their accounts.

CTFs were put in place for all children born between 1 September 2002 and 2 January 2011 provided they were living in the UK and not subject to immigration controls.

But almost £2.5bn is thought to be sitting idle in Child Trust Funds (CTFs) taken out for children who’ve since become separated from their accounts. The Share Foundation believes about a third of all accounts are lost to their rightful owners.

This equates to more than 6 million CTFs created, worth more than £9bn. It’s estimated more than a million of these accounts are ‘Addressee Gone Away’ – lost to the young person concerned – and a further possible two million young people have little or no awareness of the money they’re entitled to.

This disproportionately affects disadvantaged families, with roughly 80 per cent of CTF accounts for families receiving Child Tax Credit being ‘missing’, according to The Share Foundation.

Analysis from The Share Centre shows the amount in many CTFs could have already more than tripled over the course of a childhood, if they’ve been held in investment CTF accounts.

One invested in a simple FTSE 100 tracker fund, for example, could have returned £801.10 from the initial £250 government contribution in September 2002.

This is drastically higher than what could be expected if the money had been held in a cash CTF as a standard savings account would have only accumulated up to £351.81. After inflation this would effectively be worth £242.71, about 3 per cent less than the initial government contribution.

Gavin Oldham, chairman of The Share Foundation, said: “As the oldest Child Trust Fund recipient reaches 17 years of age on 1st September, we will be entering a period of 10 years in which over six million young people throughout the UK could benefit substantially. These fortunate teenagers already own their accounts, although huge numbers don’t know it. It is one of the biggest opportunities, and challenges, in the field of personal finance today.”

HMRC is making the process of finding a lost CTF easier. To use the service you need to be the parent or legal guardian, or the young person whom the account belongs to and aged over 16, and have a Government Gateway ID.

You can visit HMRC online and enter your Government Gateway ID to find out where your CTF is held.

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