HM Revenue and Customs (HMRC) has launched a new campaign reaching out to individuals born before 2005 to inform them about unclaimed Child Trust Funds (CTFs) that could be worth an average of £2,200. The initiative specifically targets 21-year-olds who may be unaware that they hold these tax-free savings accounts.
Child Trust Funds were introduced by the Labour government under Prime Minister Gordon Brown in 2005 as a savings scheme for children born between September 2002 and January 2011. At the time, eligible children received an initial government payment of around £250, with additional contributions of £250 available for children from low-income families or those in local authority care. Parents were encouraged to manage these funds and could add up to £9,000 annually.
In cases where parents did not open a CTF within 12 months of a child’s birth, HMRC automatically opened one on their behalf. Despite this, many young adults remain unaware of their account’s existence or the balance it holds. “Hundreds of thousands of young people in this country don’t know they have a CTF, let alone how to access it,” said Lucy Rigby, City Minister and Economic Secretary to the Treasury. “Some will have a couple of thousand pounds sat there that would really help them as they begin adult life.”
READ MORE: Strict Nighttime Driving Ban Imposed in Black Country Until 2027
READ MORE: DVLA Faces Critical Decisions on 830,000 Medical Driving Licences
The accounts are held across various banks and building societies, including major institutions such as HSBC UK and Nationwide. Following recent meetings with representatives from the UK banking sector, HMRC is now poised to send letters to all 21-year-olds with unclaimed CTFs, encouraging them to claim their savings.
Upon reaching the age of 18, account holders gain full control over their Child Trust Fund, allowing them to withdraw or reinvest the money as they see fit. However, it’s concerning that over 750,000 CTFs remain unclaimed, prompting HMRC’s latest awareness campaign.