There is mounting pressure on the UK government to change HMRC rules and automatically release Child Trust Funds (CTFs) to holders once they turn 21. Currently, roughly £1.5 billion remains unclaimed in these accounts, which were set up by the previous Labour government as state-funded savings for children.
An estimated 758,000 young adults aged 18 to 23 have unclaimed CTFs, with the average amount held in these accounts totaling £2,200. Many are unaware of their entitlement, leaving significant sums dormant.
One young woman, who lost her mother at age 11, shared her experience with The Guardian: “No one had said anything about it, and we just assumed we didn’t have one, unlike my friends who did.” Stories like hers highlight how the current system’s complexity prevents rightful access.
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Gavin Oldham, CEO of the Share Foundation, stresses the urgency: “While we have linked over 100,000 accounts to young adults, the volume of unclaimed accounts remains a serious issue. It’s baffling that despite government concern over youth poverty, little action has been taken to activate this valuable financial resource created by the former Labour administration.” He added that pursuing legal action to gain access could delay matters for years, negatively impacting young people who need these funds now.
Labour MP Laura Kyrke-Smith, representing Aylesbury, called the scheme’s original intention “sound” but criticised the current system as “confusing and opaque.” She advocates for the government to proactively track account owners and improve transparency so that young people can easily claim these funds.
With the average unclaimed amount per account reaching £2,200, the automatic release of CTFs at 21 could significantly ease financial pressures for many young adults, providing a much-needed boost during challenging times.