Money saving expert Martin Lewis has urged teenagers and their parents to check that they're not missing out on up to £2,000. He said that those aged 12 to 20 will have had a Child Trust Fund account set up by the Government, but that up to a million have been forgotten about.
The initiative provided a long-term tax-free savings account to children born between September 1, 2002 and January 2, 2011, with the intention of helping them out with some money when they reached adulthood. Parents could pay into the account, but the state also started everyone off with £250, or £500 for some children from low-income backgrounds.
Around 6.3 million Child Trust Funds were set up, but Martin warned that up to a million have been forgotten about. This means people may not be aware that they have savings that could be worth up to £2,000, CoventryLive reports.
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In a video posted on Twitter, he said: “This is an important message for anybody aged 12 to 20 or the parents of anybody aged 12 to 20 because you could be up to one of a million people who has a hidden £2,000 in savings that you know nothing about.”
He continued: “These Child Trust Funds were savings which locked money away until you were 18, and some of you will be 18 now, so the money is no longer locked away.
“Now, you might be thinking, but my parents didn’t have any money to put in. It doesn’t matter, because the state started everybody off with at least 250 quid, and for some from lower income backgrounds £500.
"So every child trust fund between those dates had money in it. But of the 6.3 million trial trust funds that were active. It’s thought up to a million of them are lost, meaning people have lost track of them, or are unaware that you have them, and that could be you.”
Martin then explained how much money teenagers may be missing out on. He said: “To put this in context, GOV.UK estimates that the average child trust fund has £2,100 in now. I think if it was inactive and nobody put money and you’ve probably got less than that, but it’s still likely to be 3-4-500,or £1,000 or possibly more so this is really important.
“This is really about checking to make sure you know you have a child trust fund. You know where the money is, and you can access it when it’s time. Thankfully, to do that, there is a tool on gov dot UK. Just search child trust fund on there to do it.”
The tool can be used by parents and guardians of under 18s to monitor the account. They will generally need their national insurance number and their government gateway to do it online.
He added: “Once you put your details in within three weeks, you should hear from HMRC which bank or building society has your money and what you can then do to get access to the cash final. Quick note. If you’re under 18 or your child is under 18, the money is still locked away in a child trust fund because that’s now a dead account.
“There aren’t any new ones. You can’t open them anymore. Although they didn’t give you the 250 quid cash start in the junior ISA, then what you can do is you can apply to open a junior ISA or your child can apply to open to a junior ISA, and then within that there will be a transfer form, which allows you to transfer the child trust fund across into the junior ISA. So you now have all the money in the junior ISA at a higher interest rate.”
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