430,000 Child Trust Funds remain unclaimed – What you need to know

3 min Read Published: 21 Sep 2023

430,000 Child Trust Funds remain unclaimed - what you need to knowHM Revenue and Customs (HMRC) has urged those aged 18 to 21 to check whether they have an unclaimed Child Trust Fund as it revealed that as of April 2022, almost 430,000 Child Trust Funds remain unclaimed, each averaging around £2,000. In this article, we explain what a Child Trust Fund is, how to find out if you or your child has one, and finally, what you can do if you find you have a matured Child Trust Fund.

What is a Child Trust Fund and how does it work?

A Child Trust Fund is a long-term, tax-free savings product launched by the government in 2005 in order to help initiate and encourage savings for children in the UK.

All children born after 01 September 2002 were issued with a Child Trust Fund voucher to the value of £250 and it could be invested in one of a number of Child Trust Fund products through providers such as Natwest, Royal Bank of Scotland and Foresters. If the vouchers were not invested within the first year of issue, HM Revenue and Customs would open a stakeholder account on behalf of the child.

Some children born into low-income families and/or local authority care may have received a further £250 into their Child Trust Fund, giving them a starting savings pot of £500.

Child Trust Funds stopped being issued to children born after 02 January 2011.

Useful facts about a Child Trust Fund

  • Children can take control of their Child Trust Fund account from the age of 16 or alternatively, choose for their parents to retain control of the account
  • The Child Trust Fund matures once the child reaches age 18. The money can be withdrawn from the account or moved to another savings or investment product
  • Up to £9,000 can be paid into a Child Trust Fund each year, free of tax until it matures

How to find a Child Trust Fund

Many parents who invested a Child Trust Fund voucher on behalf of their child may have forgotten which provider the money was invested with, especially if it was invested on their behalf by the government. Furthermore, many Child Trust Fund providers hold inaccurate address and contact details for parents and children.

There are a couple of ways that parents and children can request information to help them locate the details of their Child Trust Fund provider. These are as follows:

  • HMRC Online Tool - Gov.UK provides a helpful tool to help you track down your Child Trust Fund. Simply click on the "Find a Child Trust Fund" link and complete the online form. You will need your National Insurance number, Gateway ID and password (you can create this if you do not already have one).
  • Postal request - If you prefer, you can request the information by post. Write to: Charities, Savings and International 1, HMRC, BX9 1AU with your request, including the parent/child's name, date of birth, address and adoption information if appropriate and you should receive a response within 3 weeks.

Young Enterprise and Wealthify are working together to create a campaign that includes free tools for teachers, providing education aimed at young people specifically about Child Trust Funds and the possible ways in which the fund could be used to support their ambitions.

"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." - Young Enterprise CEO, Sharon Davies

Can you transfer a Child Trust Fund before it matures?

Yes, a Child Trust Fund can be transferred to another Child Trust Fund provider, or alternatively a Junior ISA, a product launched in 2011 which ultimately replaced the Child Trust Fund. If you are thinking of transferring a Child Trust Fund to a Junior ISA, then take a look at our Best Junior ISA article, where we list the top providers in the UK. If you don't have a Child Trust Fund and are thinking about saving for your child or children then there are a number of options you could consider. We've already discussed Junior ISAs but you may also want to consider a Junior SIPP, a specific children's savings account or even Premium Bonds. You will find further information about all of these options in our article, "Investing for children: What are your options?".

What to do once a Child Trust Fund matures

When a Child Trust Fund matures, money can no longer be added and the funds are held in a 'protected account' until the provider is contacted by the account holder. Once matured, the money can be withdrawn and used by the account holder however they wish, or, if preferred, the money can be transferred to an alternative savings account or investment product.