Young adults urged to claim forgotten ‘pot of money with their name on’

A child trust fund is a long-term, tax-free savings account.

The account is set up for children born between September 2002 and January 2011.

Many children got around £250 each from the state at the time their CTF was started.

Children from low-income families or in local authority care received an extra £250.

Britons will be given the opportunity to withdraw cash once the child in question turns 18.

Angela MacDonald, HMRC’s second permanent secretary and deputy chief executive, said: “Many 18 to 21-year-olds are starting out in first jobs or apprenticeships, starting university or moving into their first home and their child trust fund is a pot of money with their name on.

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“I would encourage young people to use the online tool to track it down or, for parents of teenagers, to speak to them to ensure they’re aware of their child trust fund.

“It could make a real difference to their future plans.”

Sharon Davies, chief executive of Young Enterprise, added: “We would encourage all young people to investigate if they have money which is unclaimed in a child trust fund and to use it wisely.

“A disproportionate amount of the money is unclaimed by young people from disadvantaged backgrounds who are the very people who would benefit most from these funds.

“The investment could be placed into an adult Isa or put towards driving lessons, education or starting a business.

“The money in a child trust fund has the potential to be life-changing and the lack of knowledge about them shows the importance of financial education and financial planning from a young age.”

There are a total of 5.3 million open child trust fund accounts.

More than half a million matured accounts have been claimed or transferred into individual saving accounts.

Families have the choice of putting up to £9,000 a year tax-free into a child trust fund until the account matures.