Hundreds of thousands of Brits owed £1,980 from ‘forgotten’ savings account | Personal Finance | Finance
Hundreds of thousands of Brits owed £1,980 from ‘forgotten’ savings account (Image: Getty)
Hundreds of thousands of Brits could be missing out on nearly £1,980 in savings, with HMRC ramping up efforts to urge people to check. The Government has announced plans to contact thousands of young people about forgotten Child Trust Funds (CTFs).
In April last year, the average unclaimed CTF was worth £1,980, with £1.5 billion sitting unclaimed. CTFs were introduced by the Government in 2005 to ensure every child had a “concrete stake” in the economy and access to an asset on which to build a financial future once they reached 18. The scheme ran for children born between September 1, 2002 and January 2, 2011.
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HMRC is contacting people who have an account (Image: GETTY IMAGES)
The Government is now undertaking an awareness campaign urging young people to locate their CTFs through the free “Find My Child Trust Fund” service on GOV.UK.
Economic Secretary to the Treasury, Lucy Rigby, said: “Hundreds of thousands of young people in this country don’t know they have a CTF, let alone how to access it. Some will have a couple of thousand pounds sat there that would really help them as they begin adult life.
“I’m determined that those who have CTFs are made aware that they have this money.
“Together, we will ensure funds from these Child Trust Funds can be accessed by young people to help give them the best start to adult life.”
At present, it’s thought that more than 750,000 accounts are going unclaimed.
To build on existing efforts, HMRC will write to all 21-year-olds whose accounts remain unclaimed to inform them that they have a CTF.
Sarah Coles, head of personal finance at AJ Bell, said: “Cash-strapped young adults could have around £2,000 sitting forgotten in a Child Trust Fund. The Government is trying to persuade 21-year-olds to track theirs down, but it shouldn’t stop there.”
“At a time when the Government is working hard to build a nation of investors, it’s ironic that millions of young people were investing from the day they were born, and yet hundreds of thousands of them never had any idea about the money – let alone how investments have powered the growth of their nest egg during this time.
“It’s hard to imagine losing track of thousands of pounds, but in a huge number of cases, the parents may never have known where the money went. If they didn’t pick a provider in time, the government did it for them, and of the 6.3 million accounts, 1.8 million of them were opened by HMRC.
“Others made a deliberate decision to pick a specific account, but lost track over the years as they moved house and forgot to keep their contact details updated.”
She added: “This nudge is the latest step in the right direction.”
But, Sarah warns that many young people are busy, and not all of them are riveted by letters from the taxman.
How to locate a missing Child Trust Fund
People can use the Government’s online tool to trace the money – all young people need is their National Insurance number and date of birth.
Ms Coles said: “Once you’ve found a mature CTF, you may need to spend the money on vital essentials, but some people will be able to use it to build an investment habit that could stand them in good stead for the rest of their life.
“The huge growth in some of these investments since they were set up should reveal the enormous potential that investment holds.”
However, it’s not just those with mature accounts who should be tracking them down. While the child is under 18, anyone with parental responsibility can do it for them, using the Government tool.
Ms Coles added: “Once you’ve found the money, it’s worth considering a switch. Since 2015, you have been able to move from a CTF into a Junior ISA.”
What is a Child Trust Fund?
All children born between September 1, 2002 and January 1, 2011, will have received money in a CTF.
How much they got will depend on when they were born, with those born later getting smaller sums.
Some were savings accounts, and some were investment accounts.
The investment accounts were either stakeholder CTFs – which followed specific investment and charging guidelines, or non-stakeholder investment CTFs – which had more flexibility over both investment and charges.
If parents didn’t pick an account within 12 months, HMRC would put it into a stakeholder CTF.
