The British Government has urged about 430,000 18-21 year olds to claim their Child Trust Fund cash worth an average of £2,000.
This was disclosed by the HM Revenue and Customs (HMRC) on Monday to claim their cash as part of United Kingdom Savings Week (18 to 24 September 2023).
Child Trust Funds are long-term, tax-free savings accounts and were set up for every child born between 1 September 2002 and 2 January 2011, with the government contributing an initial deposit of at least £250.
Funds can be withdrawn once the account matures when the child turns 18 while a recent student survey, conducted by UCAS, asked first and second year university students about Child Trust Funds.
And the results showed that they were most interested to know how much money was in their account (43%) and how to claim it (32%). The survey also revealed 60% of students got their information about Child Trust Funds from their parents.
It was revealed that there are currently 5.3 million open Child Trust Fund accounts. Young people aged 16 or over can take control of their own Child Trust Fund, although the funds can only be withdrawn once they turn 18.
More than 500,000 matured Child Trust Fund accounts have been claimed or transferred into an ISA since the oldest children on the scheme turned 18 in September 2020.
While families can continue to pay up to £9,000 a year tax-free into a Child Trust Fund until account matures. The money stays in the account until the child withdraws or reinvests it into another account.
HMRC’s Second Permanent Secretary, Deputy Chief Executive, Angela MacDonald said: “Many 18-21 year olds are starting out in first jobs, apprenticeships, starting university or moving into their first home and their Child Trust Fund is a pot of money with their name on.
“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”, she added.