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19/09/2023
18-21 Year Olds Urged To Check Unclaimed Child Trust Fund
Young people across the UK are being urged to check if they have an unclaimed Child Trust Fund (CTF) after a recent UCAS study found many 18-21 years olds had yet to claim their cash.
Child Trust Funds were a long-term, tax-free saving accounts given to every child born between 01 September 2002 until 02 January 2011. Each account was opened with an initial deposit of £250 from the UK government. The funds can be withdrawn once the child reaches 18.
HM Revenue and Customs (HMRC) has called on almost 430,000 18-21 year olds to check if they have an unclaimed Child Trust Fund, with the average account work around £2,000.
In a recent UCAS survey, first and second year university students were asked what they knew about the CTFs. 43% of respondents did not know how much money was in their CTF, while 32% wanted to know how to claim the funds.
Young adults and parents can search on GOV.UK to find out where their Child Trust Fund account is held.
Angela MacDonald, HMRC's Second Permanent Secretary and Deputy Chief Executive, said: "Many 18-21 year olds are starting out in first jobs or apprenticeships, starting university or moving into their first home and their Child Trust Fund is a pot of money with their name on. I would encourage young people to use the online tool to track it down or, for parents of teenagers, to speak to them to ensure they're aware of their Child Trust Fund. It could make a real difference to their future plans."
There are currently 5.3 million open Child Trust Fund accounts. Young people aged 16 or over can take control of their own Child Trust Fund, although the funds can only be withdrawn once they turn 18. More than 500,000 matured Child Trust Fund accounts have been claimed or transferred into an ISA since the oldest children on the scheme turned 18 in September 2020.
Families can continue to pay in up to £9,000 a year tax-free into a Child Trust Fund until the account matures. The money stays in the account until the child withdraws or reinvests it into another account.
The UCAS survey revealed that 74% of respondents were aware of Child Trust Funds.
Further findings include:
• more men (75%) were aware of Child Trust Funds compared to 73% of women
• 78% of 19 year olds were aware of Child Trust funds compared to 71% of 20 to 21 years olds
• of the people who had not yet claimed their Child Trust Fund, 76% of respondents were likely to take steps to learn more about how to withdraw it.
Sharon Davies, CEO of Young Enterprise added: "We would encourage all young people to investigate if they have money which is unclaimed in a Child Trust Fund and to use it wisely. A disproportionate amount of the money is unclaimed by young people from disadvantaged backgrounds who are the very people who would benefit most from these funds. The investment could be placed into an adult ISA or put towards driving lessons, education or starting a business.
"The money in a Child Trust Fund has the potential to be life changing and the lack of knowledge about them shows the importance of financial education and financial planning from a young age."
Child Trust Funds were a long-term, tax-free saving accounts given to every child born between 01 September 2002 until 02 January 2011. Each account was opened with an initial deposit of £250 from the UK government. The funds can be withdrawn once the child reaches 18.
HM Revenue and Customs (HMRC) has called on almost 430,000 18-21 year olds to check if they have an unclaimed Child Trust Fund, with the average account work around £2,000.
In a recent UCAS survey, first and second year university students were asked what they knew about the CTFs. 43% of respondents did not know how much money was in their CTF, while 32% wanted to know how to claim the funds.
Young adults and parents can search on GOV.UK to find out where their Child Trust Fund account is held.
Angela MacDonald, HMRC's Second Permanent Secretary and Deputy Chief Executive, said: "Many 18-21 year olds are starting out in first jobs or apprenticeships, starting university or moving into their first home and their Child Trust Fund is a pot of money with their name on. I would encourage young people to use the online tool to track it down or, for parents of teenagers, to speak to them to ensure they're aware of their Child Trust Fund. It could make a real difference to their future plans."
There are currently 5.3 million open Child Trust Fund accounts. Young people aged 16 or over can take control of their own Child Trust Fund, although the funds can only be withdrawn once they turn 18. More than 500,000 matured Child Trust Fund accounts have been claimed or transferred into an ISA since the oldest children on the scheme turned 18 in September 2020.
Families can continue to pay in up to £9,000 a year tax-free into a Child Trust Fund until the account matures. The money stays in the account until the child withdraws or reinvests it into another account.
The UCAS survey revealed that 74% of respondents were aware of Child Trust Funds.
Further findings include:
• more men (75%) were aware of Child Trust Funds compared to 73% of women
• 78% of 19 year olds were aware of Child Trust funds compared to 71% of 20 to 21 years olds
• of the people who had not yet claimed their Child Trust Fund, 76% of respondents were likely to take steps to learn more about how to withdraw it.
Sharon Davies, CEO of Young Enterprise added: "We would encourage all young people to investigate if they have money which is unclaimed in a Child Trust Fund and to use it wisely. A disproportionate amount of the money is unclaimed by young people from disadvantaged backgrounds who are the very people who would benefit most from these funds. The investment could be placed into an adult ISA or put towards driving lessons, education or starting a business.
"The money in a Child Trust Fund has the potential to be life changing and the lack of knowledge about them shows the importance of financial education and financial planning from a young age."
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