Up to 1.74 million accounts may have become forgotten funds. Kyle Caldwell explains how to find a lost CTF.
If you know anyone with a child or grandchild who has turned 16 since last September, you can help ensure they don’t miss out on ‘free’ cash that might be sitting inside a Child Trust Fund (CTF) – the precursor to the Junior Isa.
CTFs are now coming of age: an estimated six million young people have money in these accounts, which contain a government contribution of £500 for every child.
CTFs were introduced to encourage parents to save for their children. It was a successful savings vehicle, but it was scrapped and the tax-free giveaway was stopped at the start of 2011. Children born since this date, including my son, have not received this financial boost.
But concerns have been raised that up to 1.74 million accounts – automatically opened by HMRC as parents failed to register for the scheme – may become forgotten funds. The Share Foundation, which is campaigning for these accounts to be tracked down, has called on the government to address the problem.
In contrast, those parents who proactively opened a child trust fund through a provider such as a fund manager or building society will be contacted. Children aged 16 can take control of their CTF, and change the investment and provider. The money, though, cannot be withdrawn until they reach age 18.
The Share Foundation points out that, rather than wait for government action, which may never happen, everyone can help spread the word by informing young people and their parents about the accounts and how they can be tracked down. Go to HMRC’s website (gov.uk/child-trust-funds) and submit your information. You should find out where your or your child’s CTF is within 15 days.