Neglected Child Trust Fund Lying Unclaimed

09 May 2023

A recent investigation into Child Trust Funds (CTFs) by the National Audit Office (NAO) has revealed that, disturbingly, nearly £400 million in matured CTFs remain unclaimed.

CTFs were opened for some 6.3 million children born between 1 September 2002 and 2 January 2011 into which the government paid £2 billion.

Unclaimed funds

The first CTFs began maturing from 1 September 2020 onwards as children reached 18. By 5 April 2021, some 175,000 18-year-olds had either withdrawn or reinvested the funds from their matured CFTs, but 145,000 (45%) matured CTFs went unclaimed. A more up-to-date estimate shows the situation improving, but 27% of CTFs maturing at least one year earlier are still unclaimed.

There are various reasons for this:

• 28% of CTFs – 1.7 million accounts – were set up by HMRC when parents did not do so. Without parental involvement, it is no surprise that account holders may be unaware of a CTF's existence.
• The number of CTF providers has shrunk to 55, compared to 74 in 2011. Some have merged, with others exiting the CTF market. This means many CTFs will now have a different provider to when the account was set up.
• Although HMRC has begun publicising the fact that a child might have a CTF, such as writing to 15-year-olds with their National Insurance number, the NAO is generally unimpressed with HMRC's performance. Much of HMRC's statistical data is incomplete, with several active CTF providers not providing annual return data.

Tracing lost accounts

As a result of government contributions, every CTF has between £100 and £500 invested, even if no family contributions have been made. So, it is worthwhile tracking down lost accounts.

• If the provider is known, then they should be contacted directly.
• If the provider is not known, HMRC provides a tracing service for parents and guardians, or for those aged at least 16 and looking after their own CTF. There is an online form that can be used, although details can also be requested by post.

HMRC will usually respond with details of the CTF provider within three weeks.

The starting point for HMRC's CTF tracing service can be found here.