Is your child or grandchild missing out on a financial windfall?

As a parent, you’ll never stop worrying about your children and as a grandparent, you’ll never stop wanting to spoil them!

The soaring cost of living has hit young people especially hard. Perhaps your child is losing sleep over how to survive financially at university? Or maybe you have a grandchild who has worked hard to save a sizeable deposit yet is still finding it impossible to get on the property ladder?

You’re probably wondering how you can help the young people in your family during these financially challenging and uncertain times. If so, it’s possible that they have a savings pot they are unaware of.

Data reported by MoneyAge shows that thousands of young adults aged between 18 and 21 have unclaimed savings averaging £2,000 sitting in Child Trust Funds (CTFs).

Read on to find out if your child or grandchild is missing out and learn how to help them trace their fund.

How Child Trust Funds work

Every child born in the UK between 1 September 2002 and 2 January 2011 who had been awarded Child Benefit was eligible for a Child Trust Fund, which is a long-term, tax-free savings account.

If a child’s parent or guardian failed to open a CTF on their behalf, HMRC may have set one up in their name.

The aim was to provide all young people with a financial nest egg that they could access at the age of 18 and to encourage a healthy attitude towards saving and financial planning in both parents or guardians and their children.

The government awarded one £250 voucher when the child was born and for those on a low income, a second £250 voucher was issued when they turned seven years old. Parents and guardians could then add to their child’s CTF each year until maturity.

The scheme ended in 2011 and was replaced with Junior ISAs.

Almost 430,000 young adults have unclaimed cash in CTF accounts

A CTF matures when the child reaches 18 years old. The child is the sole account holder and is the only person eligible to withdraw funds.

Data from MoneyAge shows that there are more than 5 million open CTF accounts and over 500,000 that have matured. The first CTFs matured in September 2020 and the last will mature in 2029.

If you have children or grandchildren who are between 18 and 21 years of age, there’s a good chance they have a CTF account, whether they’re aware of it or not!

When a CTF account matures, the balance will be transferred to an ISA or held in a HMRC account until it is claimed.

However, it’s important to be aware that the value of a CTF account can reduce over time due to ongoing account charges. Also, moving the balance from a CTF to an ISA or HMRC account may not represent the best return on investment. There might be other options that deliver a better return.

So, if someone in your family is likely to have a CTF that has matured, it’s well worth tracing the account and exploring alternative saving and investment options.

How to help your children and grandchildren trace their fund

You may be unsure if your child or grandchild has a CTF account. If the parents or guardians did not set one up, HMRC may have done so on their behalf. Or perhaps you know there is a CTF in their name, but they have lost the details of the account.

Either way, you can help track the account down.

Parents and guardians can trace a CTF on behalf of under-18s, but those aged 16 or over may choose to do it themselves.

The best place to start if you have limited information about the “missing” account, is to complete HMRC’s online form to find the details of a child’s CTF online. Alternatively, you can write to HMRC to request this information by post.

To use the online form, you’ll need the child’s National Insurance number and their Government Gateway user ID and password.

If your child or grandchild does not already have an account, don’t panic. It’s easy to create one when you log in and start the process of tracing their CTF online.

Once you have submitted the online form, expect to wait around three weeks to receive a letter from HMRC with the details of the Child Trust Fund provider. You or the account holder can then contact the provider to reclaim the fund.

How to spend a CTF when it matures

So, you’ve leapt through all the hoops and your child or grandchild now has access to their matured Child Trust Fund. What next?

Remember, that the money held in a CTF belongs to the named account holder, namely your child or grandchild. No one else is eligible to make withdrawals so, if you set up the fund and paid into it over the years, you still have no claims on the final balance when your child turns 18.

But you can help your child or grandchild think through how best to save, invest or spend their fund. With your life experience, you probably have some useful suggestions for how to make the most of the savings that an 18- to 21-year-old might not be aware of. For example:

  • Fund higher or further education – funds saved in a CTF over 18 years could make a significant contribution towards tuition fees, rent, food, books, and any other costs associated with education beyond school.
  • Transfer funds into an adult savings account or an ISA – maximising the investment by moving it to another savings account until they’re ready to spend it might be a smart move.
  • Put the money towards a house deposit – with the average first-time buyer deposit currently standing at around £61,000, according to statistics published by Money, getting on the property ladder is challenging for many young people. Depending on the balance when a CTF matures, there may be sufficient funds to cover the cost of a house deposit.

The young people in your family could be missing out on a potential financial windfall if they don’t trace their CTF. Even if you’re unsure if there is a CTF with their name on it, it’s worth checking as HMRC set up thousands of funds for children whose parents or guardians failed to do so.

It’s easy to check online and any funds recovered could help your child or grandchild to fulfil their career, education, and house-buying dreams.

Get in touch

If you’re feeling confused about how to find a Child Trust Fund and would like some help, please reach out to us.

Please get in touch either by email at or by calling 0117 9303510.

Please note

This article is no substitute for financial advice and should not be treated as such. To determine the best course of action for your individual circumstances, please contact us.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

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