The money cannot be moved until the account holder takes action, but many may have forgotten about these savings
HMRC is urging everyone born in a specific nine-year span to check if they are eligible to claim their Government-backed account. On average, these accounts are holding £2,200 but unless the account holders remember to claim their cash, the money has to lie dormant.
Taking to X just before the start of the new tax year, the department guided people to use its Child Trust Fund locator tool. The short-lived Child Trust Fund scheme was set up for each child born between September 1, 2002 and January 2, 2011.
A Child Trust Fund is a long-term tax-free savings account where the Government deposited an initial £250 for the child. Parents could then save up to £9,000 in the account each year.
While HMRC reports that the average account now has £2,200 sitting in it, parents who maxed out their savings threshold each year could have saved up over £160,000 by the time their child turned 18.
Only the account holder, the child who the fund was set up for, can withdraw the money once they turn 18, although they can take control of the account from the age of 16. If they don’t withdraw the funds, this money continues to lie dormant until they do.
The oldest people to have been eligible for Child Trust Funds are now 23, meaning they may have savings which have sat idle for the last five years. While the youngest Child Trust Fund holders are still three years away from being able to claim their savings.
HMRC has a ‘Find your Child Trust Fund’ tool on its website to check if you or your child might have one of these accounts.The process to claim the cash is simple and can be done yourself.
If you know the account details, you can go straight to the banking institution that holds the account to withdraw it. It’s not liable for income tax and many people opt to move this money into adult ISAs to keep the tax-free element.
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However, if you don’t know the account details, you can request this information from HMRC. You can only do this if you are the account holder and at least 16 years old or if you’re the parent or guardian of an account holder who is under 18.
You’ll need to provide the National Insurance number, full name, address, date of birth and any previous names of the child the account was opened for. Once you have provided all of this to HMRC you should receive a letter from the department within three weeks containing the details of the Child Trust Fund provider.
However, if it’s for a child that was adopted or you were given parental responsibility for them by a court you may need to supply HMRC with further information. This will be set out in a letter after your request to track down the account.
