HM Revenue and Customs (HMRC) has issued a timely alert to parents across the UK, specifically targeting those whose children have recently celebrated their 18th birthday. The tax authority highlights that a significant number of young adults may have unclaimed money waiting in dormant Child Trust Fund (CTF) accounts, with the average pot holding around £2,200.
What is a Child Trust Fund and Who is Eligible?
A Child Trust Fund is a long-term, tax-free savings account established for children born between 1 September 2002 and 2 January 2011. The government-backed scheme provided an initial voucher to start the account, often topped up by family savings. However, the scheme was closed to new entrants in January 2011, with Junior ISAs introduced as its successor.
It is crucial to note that a child cannot hold both a CTF and a Junior ISA simultaneously. If a Junior ISA is opened, parents or guardians must request the provider to transfer the existing Child Trust Fund into the new account to consolidate the savings.
How to Locate a Missing Child Trust Fund
If you suspect your child has a CTF but are unsure of the provider, HMRC offers a dedicated tracing service. The process differs slightly depending on whether you are the parent or the now-adult child.
As a parent or guardian searching for a child's fund, you will need to provide the following details to HMRC:
- The child's full name, date of birth, and address.
- Any previous names used by you or the child.
- The child's National Insurance number, if available.
If you are the young adult aged 16 or over, you can initiate the search yourself. You will need your National Insurance number and, if applicable, adoption details. The online form must be completed in one session, as it cannot be saved and returned to later.
HMRC typically sends a letter with the provider's details within three weeks of receiving an online request. Postal applications will take longer. If no response is received within six weeks, you should follow up with HMRC in writing, quoting any reference number provided.
Accessing the Funds and Next Steps
Once the provider is identified, the account holder—now legally an adult at 18—must contact the provider directly to cash in the fund. HMRC recently used its official social media channel to remind the public, stating: "Parents! If your child has recently turned 18, they may have a #ChildTrustFund, worth an average of £2,200."
The authority also reiterated that its helplines are available for general queries, but advised the public never to share personal details on social media platforms.
This warning serves as a crucial prompt for families to track down these forgotten savings, ensuring that young adults can access financial assets that are rightfully theirs as they start their independent lives.
