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Child Trust Funds are long-term, tax-free savings accounts, and HMRC figures have shown that 760,000 matured Child Trust Funds, worth an average of £2,000 each, remain unclaimed.
Child Trust Funds were set up by the government in 2005, and anyone born between 1st September 2002 and 2nd January 2011 could have an account, unless they or their parents/guardians transferred the money into a Junior ISA. The account matures once the child turns 18, and the account owner can continue investing, make a withdrawal, or transfer the money to another ISA provider. Any income and gains are exempt from UK income and capital gains tax, and the holder of the account, the registered parent/guardian, and other third parties such as grandparents can make contributions each year, with the current allowance limit being £9,000.
The scheme is now closed to new applicants.
Recently, a number of companies have been advertising services to help find these unclaimed funds, and taking a fee for the service, however, there is no need to pay to locate these accounts, and firms that are undertaking this work may not be FCA regulated, as tracing is not an activity that needs authorisation.
If you or your child were born between the eligible dates, checking if you have an unclaimed Child Trust Fund is straight forward, and can be done for free:
You can contact your Child Trust Fund provider directly if you already know who holds the account, and they’ll help you arrange a withdrawal or transfer.
If you’re unsure which provider manages your fund, you can use HMRC’s free online tracing tool on GOV.UK to locate it. You will be asked to provide information to verify your identity and locate the account, and you need to complete the form in one go, so check what you may need before you begin. Confirmation of Trust Fund Details are sent in a letter, which usually takes about 3 weeks to provide.
You’ll need to verify your identity with the provider, but there’s no cost to do this.
Learn more about types of savings accounts that could be available with our Savings Accounts Explained guide.
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