HMRC is preparing to contact hundreds of thousands of young adults who have not claimed their Child Trust Fund accounts, which hold an average of £2,200 each. According to multiple reports, approximately 758,000 people aged 18-23 have unclaimed accounts, and letters will be sent to those aged 21 for the first time. The initiative aims to reunite young people with savings they may not know exist.
Child Trust Funds were introduced by the Labour government in 2005 for children born between 1 September 2002 and 2 January 2011. Each child received an initial £250 from the government, with an additional £250 for those from low-income families or in care. If parents did not open an account within 12 months, HMRC opened one on their behalf. Parents or guardians could also add more money over time, and the funds grow tax-free.
Many accounts remain unclaimed because families have moved, changed banks, or simply forgotten about them. Parents often opened these accounts years ago but did not share the details with their children, and over time paperwork was lost or forgotten. Young adults who are now 18 may have had access to these funds for years but have not withdrawn any money.
According to The Share Foundation, a charity that helps reunite young people with their Child Trust Funds, young people in northern England are disproportionately affected by unclaimed savings. The regional disparity highlights potential gaps in awareness and outreach.
There are growing calls from experts for funds to be automatically released to account holders when they turn 21, rather than requiring them to claim. A 2023 report from the Public Accounts Committee criticized HMRC and providers for failures regarding the scheme, including poor communication and lack of proactive measures.
The Share Foundation has been actively working to reunite young people with their funds, but the scale of the problem remains significant. The charity's efforts complement HMRC's new letter campaign.
HMRC warns that those born between 2002 and 2011 could each have about £2,200 that has not been claimed. This money is not a loan or benefit; it is the account holder's own savings, held through a government program, and it is tax-free. If parents contributed regularly, the amount could be much higher than the average.
The exact number of unclaimed accounts and the precise age range of holders remain subject to some discrepancy, with some sources citing 15-24 instead of 18-23. The timing of the letters and their specific contents have not been confirmed. It is also unclear how much money is held in accounts that have received regular contributions versus those with only the initial government payment. The government has not announced whether it will consider automatically releasing funds at age 21, and no timeline for such a decision has been provided.