HMRC has warned that around 750,000 young people in the UK have unclaimed Child Trust Fund accounts, with the average account holding £2,200, according to HMRC. The government agency urged young adults to check if they have forgotten savings, as many accounts remain untouched years after they were opened.
Child Trust Funds were introduced by the Labour government in 2005 for children born between 1 September 2002 and 2 January 2011, according to HMRC. Each child was given £250 from the government to launch the account, with an additional £250 for those from low-income families or in care, HMRC stated. If an account was not opened by a parent within 12 months, HMRC opened one on their behalf, the agency said.
According to financial experts, many families have moved, changed banks, or simply forgotten about old accounts, leading to unclaimed money. Young adults who are now 18 may have had access to these funds for years but haven't withdrawn any, leaving the money sitting in accounts, financial advisors noted.
If parents contributed regularly, the amount could be much higher than £2,200, according to research. Some accounts may have grown significantly through investment returns or additional deposits, making it even more important for young people to check, experts noted.
The Share Foundation, a charity that works to reunite people with their Child Trust Funds, highlighted regional disparities in unclaimed accounts, with young people in northern England disproportionately affected, the charity said. The foundation has been working to raise awareness and help individuals track down their funds.
HMRC is planning to send letters to account holders aged 21 to reunite them with their funds, the agency confirmed. The letters will provide information on how to access the accounts and encourage recipients to take action.
There are growing calls for funds to be automatically released to account holders when they turn 21, according to experts. Currently, young people must actively claim their money, which many fail to do. Automatic release would ensure that everyone receives their savings without needing to take extra steps, advocates argue.
The exact number of unclaimed Child Trust Fund accounts remains unclear, as does the precise total value of unclaimed funds. HMRC has not specified when exactly the letters will be sent, nor how many accounts have been claimed so far. The specific regional disparities beyond northern England have also not been detailed. However, the warning serves as a reminder for young adults to check their financial records and claim what is rightfully theirs.