What are Child Trust Funds (CTFs)?

• Child Trust Funds are long-term tax-free savings accounts.
• They were set up for all eligible children living in the UK born between 1 September 2002 and 2 January 2011 inclusive.
• The government introduced the scheme in 2005 and it is managed by HM Revenue & Customs (HMRC).
• Most children received around £250 each from the government at the time their account was set up. Children from low-income families and children in care received an additional £250 from the government.
• Family and friends could contribute up to £1,200 per year.
• Once the account matured, when the person turned 18, they could use the money however they pleased.

Surely, anyone with a Child Trust Fund would know about it?

• Not necessarily... in 2018, a charity involved with CTFs raised concerns that many children with a CTF may have lost track of their accounts.
• The latest data on CTFs up to 5 April 2021 shows that there was £394m in matured CTFs lying unclaimed or un-transferred. Official figures show that the average market value of CTFs was just under £2,000.
• The first CTF account holders reached the age of 18 in September 2020. By 5 April 2021, around 175,000 out of 320,000 18-year olds had claimed and either withdrawn or re-invested a funds from their matured CTFs. That's means, at that time, there were 145,000 unclaimed accounts.
• The axing of CTFs by the Government in 2011 meant that opportunities for the government to nudge young people to engage with their accounts were lost.
• Furthermore, HMRC set up 28% of CTF accounts on children's behalf because parents or guardians did not do so. Parents of children from low-income families were less likely to open accounts compared to higher-income families.

Ok... this sounds like it might apply to me. How do I find out?

• Visit this online tool from HMRC - it allows young people to check whether they have a CTF.
• In 2019, HMRC also began to notify 15-year olds that they might have a CTF in the letter it sends to teenagers notifying them of their national insurance number as they approach 16 years of age.
• The Share Foundation is a charity that manages CTFs for young people who are, or who have been, in local authority care and also has an online search tool.

If this article has helped you to locate a lost Child Trust Fund, we'd love to hear about it. Let us know at studentvoice@leedsbeckett.ac.uk.

The content in this article has been created using information from the National Audit Office Investigation into Child Trust Funds - March 2023