Savings accounts

Does your child have a hidden fortune? Taxman urges teenagers to unearth old Child Trust Funds


HMRC is urging teenagers to check the status of their Child Trust Funds, amid fears that thousands of accounts have been forgotten.

The taxman issues every child with a National Insurance number as they approach their 16th birthday and, starting this month, is now prompting children to take control of their Child Trust Fund and ask their parents or guardian for further information.

Child Trust Funds were the brainchild of Gordon Brown during his time as Chancellor of the Exchequer. They offered all children born between 1 September 2002 and 2 January 2011 a tax-free £500 savings pot which could be added to over time.

The scheme was replaced by the Junior Isa and there are concerns that old accounts have been lost as they have slipped out of public consciousness.

Since September 2018, the first batch of 16-year old account holders have been able to take “guardianship” of their Child Trust Fund before being given full access at age 18. Guardianship means the child can manage the account directly with the provider. When they reach 18 they can withdraw the cash or invest in an adult Isa.

Analysis by BMO, an asset manager, estimates this first windfall wave will collectively be worth £4.7bn for those turning 18 in the next two years.

Steve Ferrari of OneFamily, a Child Trust Fund provider, said: “The government gave over six million children vouchers up to the value of £500, depending when they were born and their financial background, which parents could invest with a provider of their choice.

“In some cases, an additional voucher of up to £500 was paid in when the child turned seven.”

Mr Ferrari said parents, family and friends can invest from £10 a month up to £4,260 a year, rising to £4,368 in the next tax year.

While Child Trust Funds are no longer available, those parents with children born between 2002 and 2011 can still add cash to existing accounts. For parents who didn’t open an account, the Government opened one on each child’s behalf. Parents can ask HMRC for further information if they are unable to locate the account themselves.


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