🔔 Do you have a lost Child Trust Fund?

Do you remember the Child Trust Fund?

Launched in 2005, these accounts were introduced as a way to help parents to save for their children’s future.

All babies born between 1st September 2002 and 2nd January 2011 received a Government contribution of between £50 and £1,000, depending on when they were born and their household income.

When the scheme started, the Government gave a voucher of £250 for each child at birth, plus an additional £250 at age seven. For lower-income families, these payments were £500 each.

But of course, the scheme was expensive, so it was scaled back in 2010, with just one voucher of £50 being given to each child at birth (£100 for lower-income households).

The scheme was finally scrapped altogether in January 2011 and later replaced by the Junior ISA (JISA) in November 2011, which were available for all children born on or after 3rd January 2011 or before September 2002 – but the JISA does not come with a Government contribution.

In addition to the Government contribution, parents were able to add funds to their Child Trust Fund, up to an annual limit, which will grow tax free until the child reaches the age of 18, at which point the funds are transferred into their own name.

As a result, according to recent press reports, there is around £10bn held in Child Trust Funds, but as much as £1.2bn may be lost, as parents and guardians have forgotten where these funds were deposited – or the Government opened a Child Trust Fund for those children whose parents didn’t bother.

Even those who are good at record keeping will know how hard it can be to keep up with changes to financial companies, so those who aren’t so diligent could easily have forgotten funds.

So, it’s no wonder that so much is missing and considering that much of this is taxpayers’ money (the Government bonus), there is a possibility that this could be wasted if these accounts are not reunited with their owners.

If you or your friends and family have a child aged between 7 and 16, they could have a Child Trust Fund that has been long forgotten, especially if they have moved.

Steve Webb, former pensions minister and policy director at investment firm Royal London, says: 'This is a serious amount of taxpayer money. The Government needs to be proactive in reuniting people with money that is rightfully theirs.

'It should be looking at writing to families to remind them that they may have money sitting in one of these accounts.'

But HMRC says that the responsibility is with the providers.

So, in order to make sure that your child doesn’t miss out on a windfall when they get to the age of 18, scour through your paperwork to see if you can remember what you did with your child’s voucher.

If you can’t find anything, rather than waiting for someone to sort it out for you, one way to try and track it down is to visit HMRC’s website and fill out a form, although you will need to register for a Government Gateway account to do so.

And of course, once you do find it, review whether it is in the best place. If it’s a cash CTF, there are better rates to be had by switching to a Junior ISA, so that might be something to consider.

Happy hunting!

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