Martin Lewis has shared important information for parents of children aged between 12 and 20 about a “hidden” UK Government savings account which they may “know nothing about” that could be worth up to £2,000. The consumer champion released a short video on social media, explaining that up to one million people could be sitting on a small fortune and not even know it.
He explained to his 2.1 million Twitter followers how this is about the Child Trust Fund, a tax-free savings account which was set up by the UK Government for every child born between September 1, 2002 and January 2, 2011. The UK Government provided an initial deposit of at least £250 to start every account and its aim was to encourage a future generation of savers.
The savings accounts mature when the child turns 18-years-old. Eligible teenagers, who are aged 18 or over and have yet to access their Child Trust Fund account, could have savings waiting for them worth an average of £2,100, according to the latest figures from HM Revenue and Customs (HMRC).
The founder of MoneySavingExpert.com explained that some people from lower income backgrounds were given a £500 deposit to start the Child Trust Fund off.
This means that every Trust Fund created between September 1, 2002 and January 2, 2011, had money put in it.
Martin said: “Of the 6.3 million Child Trust Funds that were active, it’s thought up to one million of them are lost.
“Meaning people have lost track of them or are unaware you have them - and that could be you.”
He continued: ‘GOV UK estimates that the average Child Trust Fund has £2,100 in, now I think if it was inactive and nobody had put money in you’ve probably got less in that that, but it’s still likely to be £300, £400, £500, £1,000 or possibly more.”
Martin went on to explain how to check if you have a Child Trust Fund, where it is and how to access it.
How to find your Child Trust Fund
If teenagers or their parents and guardians already know who their Child Trust Fund provider is, they can contact them directly. This might be a bank, building society or other savings provider, alternatively, they can visit GOV.UK here and complete an online form to find out where their Child Trust Fund is held.
If a parent or guardian was not able to set up an account for their child, HMRC opened a savings account on the child’s behalf.
Ask HMRC to find a Child Trust Fund
You can ask HMRC to find a Child Trust Fund if you’re:
- a parent or guardian of a child under 18
- 16 or over and looking for your own Trust Fund
You can either:
- use the online form to ask HMRC where a Child Trust Fund is
- request the details by post
To use the online form you’ll need:
- your National Insurance number
- a Government Gateway user ID and password - if you do not have a user ID, you can create one the first time you sign in
You can also do it by post, full details are on the dedicated pages on GOV.UK here.
What else you should know
Teenagers aged 16 or over can take control of their own Child Trust Fund if they wish, although the funds can only be withdrawn once they turn 18 years old.
Where children have a Child Trust Fund, families can still pay in up to £9,000 a year tax-free. The account matures once the child turns 18 years old and no further money can be deposited.
They can either withdraw the funds from the matured Child Trust Fund account or reinvest it into another savings account.
Until the child withdraws or transfers the money, it stays in an account that no-one else has access to.
The Child Trust Fund scheme closed in January 2011 and was replaced with Junior Individual Savings Accounts (ISA) - find out more about this here.
To keep up to date with the latest personal finance news, join our Money Saving Scotland Facebook page here, or subscribe to our newsletter which goes out four times each week - sign up here.
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