Unclaimed child trust funds: a guide for uk families
If you or your child was born in the UK between 1 September 2002 and 2 January 2011, you may have money waiting for you in a Child Trust Fund (CTF). According to HMRC, over 750,000 of these accounts remain unclaimed, with an average value of over £2,000 each. This is not a windfall or a new scheme, but a significant amount of existing savings that many young adults and their families are unaware they own. Understanding what a CTF is, how to find it, and how to access the funds is a crucial piece of financial guidance for affected families.
This situation matters because it represents real money that can help young adults at a pivotal financial moment, whether for education costs, a first car, or a deposit for renting. The process of claiming is straightforward but requires some specific steps. This guide explains what a Child Trust Fund is, who is eligible, and the practical steps you need to take to find and access any money that may be rightfully yours.
What is a child trust fund and who is eligible?
A Child Trust Fund was a long-term savings account launched by the UK Government. Every child born in the UK between 1 September 2002 and 2 January 2011 was eligible for an initial voucher from the Government to start an account. For children from lower-income families, the initial contribution was higher. Parents or guardians were tasked with opening the account with a provider, but if they did not, HMRC automatically opened one on the child’s behalf. The scheme was replaced by the Junior ISA in 2011.
The key point is that these accounts have been growing, largely forgotten, for years. The money belongs to the child and they gain full legal control of the account when they turn 16. However, they cannot withdraw the funds until they turn 18. This means many young adults who have recently turned 18, or are about to, have a pot of money they can access but may not know exists. The average balance of £2,242 reported by HMRC is a substantial sum that could make a meaningful difference.
How to find a lost child trust fund
If you think you or your child may have an unclaimed CTF, the first step is not to contact a bank or building society directly, as you likely won’t know which one holds the account. Instead, you should use the official Government service.
The child or young adult (if they are 16 or over) can use the GOV.UK Child Trust Fund finder service. They will need to set up a Government Gateway account if they don’t have one, which requires proof of identity such as a passport or driving licence. Once logged in, the service will reveal whether a CTF exists and, crucially, who the provider is. If the young person is under 16, the parent or guardian with parental responsibility can use the service on their behalf.
What to do once you find the account
Once you have the provider’s details, you should contact them directly. If the child is now 18 or over, they can instruct the provider to close the account and transfer the money to their bank account. If they are 16 or 17, they can take control of the account’s management (for example, choosing where it is invested) but cannot withdraw the funds until their 18th birthday.
It’s also worth considering your options at this stage. Since 2011, Child Trust Funds have been able to be transferred into a Junior ISA, which may offer a wider range of investment choices or better interest rates. A young adult over 18 could also choose to transfer the matured CTF into an adult Cash ISA or Stocks and Shares ISA, which would protect the proceeds from tax within the ISA wrapper. This is a decision worth some consideration, as simply withdrawing the cash may not be the most tax-efficient long-term strategy.
Important considerations and common questions
There are a few key points to be aware of. First, the money in the CTF belongs to the child, not the parent. While parents could manage the account initially, control passes to the child at 16 and access at 18. Second, these accounts are protected by the Financial Services Compensation Scheme (FSCS) up to £85,000, so the money is safe. Finally, the growth within a CTF is free from UK Income Tax and Capital Gains Tax, a benefit that can be preserved by transferring to an ISA upon maturity.
A common question is what happens if the account is never claimed. The provider will continue to hold the funds, and the young adult can claim them at any time in the future. There is no time limit, but inflation will erode the real value of cash held in a low-interest account over many decades, so it is in the account holder’s interest to locate and manage the funds sooner rather than later.
For the hundreds of thousands of young adults affected, taking the time to check for an unclaimed Child Trust Fund is a simple but potentially very rewarding financial action. With an average of over £2,000 at stake, it is a significant financial head start that should not be left forgotten.
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