Andpound;16 billion in Child Trust Fund savings left unclaimed

More than 750,000 young people have free cash sitting unclaimed in matured Child Trust Fund accountsHundreds of thousands of young people have more than 2,000 sitting unclaimed in Child Trust Funds (CTFs), a type of tax-free savings account for children born between 2002 and 2011Ministers are working with financial companies like Nationwide, HSBC, and Sheffield Mutual to reunite savers with their accounts as part of the government's recently established taskforce

Roughly 6.3 million CTFs were opened for children born between 1 September 2002 and 2 January 2011, mostly by parents and guardians but some by HMRC.

The tax-free funds could be opened as stocks and shares or cash savings accounts.

Watch the full video here: These accounts began to mature in 2020, but over 750,000 matured accounts are still unclaimed for a variety of reasons, such as people forgetting they have them or choosing to leave the money invested.

A CTF is usually transferred into a default account with a low interest rate once it matures, at which point you can no longer add money to it.

Rachel Blake, economic secretary to the Treasury, said: "Too many young people are missing out simply because they are not aware of where their Child Trust Fund is or how to access it.

"We are working to address that by uniting government and business, enhancing coordination, and facilitating people's ability to locate and claim what is legally theirs."

"Improve tracing approaches, test more effective engagement with young people, and drive practical actions that lead to more accounts being claimed" are the goals of the taskforce, according to HM Treasury.

In April, HMRC sent letters to thousands of 21-year-olds reminding them to claim the funds in their CTFs, which led to its launch.

Through online campaigns on social media sites like X, formerly Twitter, HMRC is reminding qualified youth that they can apply for the funds.

The managing director and founder of the personal finance website Investing Insiders, Antonia Medlicott, applauded the government's taskforce but said more ought to have been done sooner.

"Unclaimed Child Trust Funds are far too common," she continued. It's unfortunate to see that some accounts have been left up to this point because they will hold much more than the 2,200 average figure that has been circulated."

How to locate misplaced Child Trust Funds.

To get the account back, you should first get in touch with the provider that the CTF was set up with.

If you are over 16, you can also request your CTF details using HMRC's Child Trust Fund tool. Make sure you have your National Insurance number with you.

If you are a parent or guardian of a child under the age of 18, you can also use this tool. The child's full name, address, and birthdate are required, along with any prior names that you or the child have used.

Even if you didn't set up a CTF for yourself or your parents, you might still have one in place. After a year, HMRC opened an account on the parents' behalf if one hadn't been created for an eligible child.

Investment platform AJ Bell's head of personal finance, Sarah Coles, stated: "Of the 6.3 million accounts opened, 1.8 million were opened by HMRC, so there's a good chance the parents of these children never engaged with where the money ended up."

"For those who did decide where to put the money, so much time has gone by that there's a good chance they moved and neglected to update their information, and if the paperwork got lost, they might have completely forgotten about these accounts."

After you've located the Child Trust Fund, what should you do?

It might be worthwhile to keep some of the CTF money invested in order to grow, unless you absolutely need it for an emergency.

Transferring the remaining CTF funds into a Junior ISA, however, might be worthwhile.

Coles clarified: "Cash CTFs frequently pay less interest, while stocks and shares CTFs typically have higher fees and fewer options than their equivalent Junior ISAs. It implies that parents should find the accounts quickly and decide whether to transfer the funds to a Junior ISA."