Young adults could be entitled to a free sum of £1,900 if they access money amassed in unclaimed child trust funds (CFTs).
The National Audit Office (NAO) has warned that people are losing track of long-term tax free savings accounts set up under a Labour government for children born between 1 September 2002 and 2 January 2011, with more than a quarter of CFTs remaining untouched for a year or more after their owners turned 18.
Parents of the 6.3 million children born during the period were sent a £250 voucher shortly after their child was born, to open a fund. If they failed to do this before the child’s first birthday, HMRC opened an account on the child’s behalf.
Those from low-income families or in local authority care received vouchers worth £500.
This sum was invested in the fund on the account holder’s behalf, and by April 2021, the average market value of CTFs reached £1,911.
But the NAO found that of the £800 million that is now owed to the first cohort, 145,000 people have not claimed money amounting to a total £394 million.
How can you claim the money?
According to GOV.UK, people should contact their child trust fund provider directly if they know who their account is with.
If they do not know the child trust fund provider, they are advised to ask HMRC to find their account.
A parent or guardian of a child under 18 can contact HMRC to find a fund, as can a person aged 16 or over looking for their own trust fund. HMRC can be contacted via an online form, or CFT details can be requested by post.
NAO said that HMRC intends to incorporate CTFs into a communications campaign in 2023.
Gareth Davies, the head of the NAO said: “At a time of economic hardship for millions of people across the country, it is important the government does enough to make sure young people are aware of, and can access, their child trust funds.”
Public Accounts Committee chair Meg Hillier said people need to be proactively helped to be reunited with their funds, adding that, in a cost-of-living crisis, the money could be “a vital lifeline to young people, particularly those from low-income backgrounds”.
An HMRC spokesman told the Times: “We want to help people access the savings and money they’re entitled to and we encourage people to check to see if they have money waiting for them.“We regularly remind people of child trust funds and how they can check if they have an unclaimed account. We are exploring further ways we can raise awareness of the scheme.”
