Scores of young people could be owed a slice of millions of pounds from a government scheme. A spending watchdog says that some of the cash, designed to help young people financially in early adulthood, has not been claimed.
The National Audit Office (NAO) said that Child Trust Funds (CTFs) could have been forgotten about or lost track of. It estimated that a quarter of them had not been touched by their owners after they turned 18.
The CTFs can be accessed when a holder turns 18 and they are a tax-free savings account for children born between September 1, 2002, and January 2, 2011. The government paid more than £2 billion into CTFs for 6.3 million children born during this period, reports the Liverpool ECHO. Most holders were handed £250 from the Government when their CTFs started, while some from low-income backgrounds or in care were eligible for an extra £250.
Gareth Davies, 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.”
Many CTFs were invested in stocks and shares, with the total market value of CTFs standing at £10.5 billion at April 2021. Some of this belonged to young people aged 18 and over who had not unlocked their accounts.
By April 2021 around 320,000 CTFs had matured in the seven months since the first account holders reached 18 in September 2020. Of these, 175,000 (55%) had been claimed by the account holders and the accounts closed, and 145,000 remained unclaimed.
Some £394 million was, by April 2021, yet to be claimed in matured CTFs belonging to young adults who had reached the age of 18, the NAO said. It is unclear how many children and young adults are either unaware of, or unable to locate, their CTF, the NAO said.
Subscribe here for the latest news where you live
It added that HM Revenue and Customs (HMRC) intends to incorporate CTFs into a communications campaign in 2023. The NAO estimated that CTF providers – including banks and building societies – could be earning collectively up to £100 million per year through charges on accounts.
Public Accounts Committee chair Meg Hillier said people need to be proactively helped to be reunited with their funds. She added that, in a cost-of-living crisis, the money could be “a vital lifeline to young people, particularly those from low-income backgrounds”.
Life through a new lens. We are Curiously. Follow us on TikTok, Instagram, Facebook and Twitter.
