Little-known bank account that could be worth over £2,100 – do you have hidden cash?
TEENAGERS born between September 1, 2002 and January 2, 2011 could claim more than £2,100 in free cash in little-known accounts.
Child Trust Funds were automatically set up for all children born during that time, with the government putting £250 into every account.
Children from low-income families received another £250 from the government, so £500 in total.
Parents were then allowed to save up to £9,000 a year in their child’s account.
But almost nine out of 10 of these accounts were never registered by the parents, a report from the National Audit Office shows.
More than half of those were accounts for children from low-income families or families in receipt of child tax credit.
An estimated 6.3 million Child Trust Fund accounts were set up during the nine-year scheme, containing about £9billion in total.
This money was invested by the government, meaning the accounts are now worth thousands of pounds.
Tens of thousands of teenagers turning 18 since September 1 last year have an average of £2,100 sitting in their accounts, according to HMRC.
But the vast majority don’t know this because HMRC doesn’t have an address or any contact details to send their account information to.
Speaking to MPs at a recent committee hearing Gavin Oldham, chair of charity The Share Foundation, said: “It is a major issue, particularly at a time of a lot of cost of living pressures on these young people.
“It is denying them a proper start to adult life.”
Teenagers turning 18 since the start of September last year can track down their child trust fund themselves.
And Andrew Hagger, personal finance expert at Moneycomms, said parents whose children were born when the scheme was running and are still under 18 should contact HMRC on their behalf.
He said: “People may have moved address and forgotten to inform their account provider – getting back in touch now could be hugely beneficial.
“It’s a substantial amount of cash and could make a massive difference especially during the current cost of living crisis.”
Dame Meg Hillier, chair of the public accounts committee, has told HMRC to step up its efforts to contact those who can claim “the money in the accounts that they deserve to have”.
How do child trust funds work?
When the child turns 18, they have access to the account and can spend the free cash on whatever they want.
Where children are still under 18, parents can still save up to £9,000 a year into their child’s Child Trust Fund tax-free.
At 16, the child can take control of their account themselves and choose where to invest their money.
Account holders must be 18 before they can withdraw the cash.
Because the accounts are tax-free, withdrawing the money does not affect any benefits or tax credits you receive.
How can I track down my child trust fund?
Parents who registered their child’s trust fund and know which provider it is held with can contact them directly.
They can provide account details and tell you how much is in the account.
If you don’t know where the account is held, you can write to Charities, Savings and International 1, HMRC, BX9 1AU.
You should include as much information as you can, including the child’s:
- Full name
- Date of birth
- Address when they were born
- National insurance number
- Any other registered addresses
If your child has a child trust fund and you want to pay some extra money into it, you can contact HMRC.
You will need your national insurance number to create a Government Gateway online and then fill out the online form.
HMRC should contact you within three weeks.