Government Urges Young People to Reclaim Unclaimed Child Trust Funds
The HM Revenue and Customs (HMRC) has announced that over half a million young people have yet to claim their Child Trust Funds, which currently hold an average value of £2,212. This initiative aims to raise awareness about these long-term savings accounts, which were established to promote financial security among children born during a specific timeframe.
What Are Child Trust Funds?
Child Trust Funds (CTFs) are tax-free savings accounts created by the government for every child born between 1 September 2002 and 2 January 2011. Upon the birth of each eligible child, the government deposited an initial sum of £250 into these accounts, fostering a culture of saving from a young age. Additional contributions can be made by parents, guardians, and family members, enhancing the financial resources available to the child upon reaching maturity.
Accessing Child Trust Funds
Young individuals can take control of their Child Trust Fund accounts at the age of 16, allowing them to manage their savings as they approach adulthood. They are permitted to withdraw funds once they turn 18, at which point the account matures, enabling access to potentially significant savings accrued over the years.
It is important to note that the funds are not retained by the government; rather, they are held in banks, building societies, or other approved financial institutions. The money remains invested until the account holder decides to withdraw or reinvest it.
Steps to Reclaim Funds
For teenagers and young adults who are aware of their Child Trust Fund provider, the process of reclaiming their funds is straightforward. They can contact their provider directly to gain access to their savings. However, for those uncertain about the location of their accounts, HMRC has introduced an online tool available on the GOV.UK website, designed to help individuals locate their Child Trust Fund provider efficiently.
Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive, emphasized the importance of this initiative, stating:
“Thousands of Child Trust Fund accounts are sitting unclaimed. We want to reunite young people with their money and are committed to making the process as simple as possible. There is no need to pay anyone to locate your Child Trust Fund; you can easily find yours by searching for ‘find your Child Trust Fund’ on GOV.UK.”
Conclusion
With a substantial number of unclaimed Child Trust Funds, this call to action serves as a reminder for young people to take advantage of their financial entitlements. By reclaiming these funds, they can benefit from the financial support set aside for them, contributing to their financial independence as they transition into adulthood.
For more information and to locate your Child Trust Fund, visit GOV.UK.