Savings accounts

One million teenagers miss out on billions in lost trust fund riches


More than a million teenagers have missed out on “free” trust fund money, handed out under Tony Blair’s Labour Government, because parents lost track of the cash or failed to invest it appropriately.

A total of £2bn in Government handouts were saved into 6.3 million Child Trust Funds between 2005 and 2011. The Government paid £250 to most children, with poorer families on benefits receiving more. Parents had the option to top up the tax-free savings by £50,000 over the years until the child turned 18.

From September 1 the first batch of 18-year-olds will receive their trust fund savings. The average teenager will get £650 apiece, according to Office for National Statistics data analysed by the Institute of Fiscal Studies, a think tank.

Some will get more. More than a fifth of accounts hold between £1,000 and £5,000 and almost one in 10 have more than £5,000.

CTF provider OneFamily previously said the average amount held in its CTFs was £2,175.

The Government-backed cash will be a welcome boost to the generation, particularly one financially disproportionately affected by the coronavirus crisis and leaving education in the midst of a severe recession.

Some 55,000 accounts will mature each month, according to HM Revenue & Customs, although research has suggested billions in forgotten savings could go unclaimed. 

Close to a quarter of parents of trust fund children said they lost track of the tax-free savings pots, according to polling carried out by Opinium Research. 

There could be as many as one million lost or dormant child trust funds, according to estimates from the lost savings tracing firm Gretel. It said this equated to £2.2bn, based on the close-to £2,200 amount held in the average CTF with OneFamily.

Gretel’s Duncan Stevens said many families lost track of their child’s savings as they had not topped them up regularly.

Around 30pc of the CTFs were opened by HMRC itself where parents or grandparents did not sign up their children or grandchildren to the scheme. Many will be unaware they even have an account at all, the tax authority said.

Others will miss out on money they could have had if they had invested their savings instead of leaving them in cash, according to Sean McCann of advisers NFU Mutual. 

Fewer than five million accounts were invested in stock market funds and more than a million left to languish in cash – the real value of which will have fallen due to inflation.

An initial £250 left in cash from 2005 would be worth around £319.40 today, based on average rates. Investing the money in the London market would have left you with £590.34 based on the returns of the FTSE-All Share index – a broad measure of the market.

Economic Secretary to the Treasury, John Glen has implored teenagers and parents to track down and make use of the funds that have been set aside for them.

For those who may have lost track of their savings provider, lost accounts can be traced easily via HMRC on


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