Maturing Child Trust Funds – What You Need to Know – UPDATE

September 26, 2021
by Rachel

People turning 18 from September 2020 can access the Child Trust Fund set up in their name – but nearly a third of all these funds are still unclaimed.

Nearly two million UK children are owed a collective £2 billion of free money, with the most valuable of these ‘lost’ funds being worth nearly £2,000 each.

Child Trust Funds were created in 2002 by Tony Blair’s Labour government, to give a financial leg-up to all children when they reach adulthood, but especially to the most disadvantaged.

Those born after August 2002 and before August 2010 were given at least £250 at birth in the form of a voucher that could be invested in a variety of funds. If the voucher wasn’t activated with 12 months, it was automatically invested in one of 14 different providers.

Parents could make deposits into their child’s Trust Fund, of between £10 and £364 a month, and on their seventh birthday children received an additional gift of £250.

However, children in households with income of £16,190 or less received £500 on each occasion, at birth and when they turned seven years old.

Now the first children to be enrolled in the Child Trust Fund scheme are reaching adulthood, and can access their money. But 1.8 million of these accounts remain unclaimed, either because the parents never knew about them, forgot about them, or moved home and lost their documents. As a result, around a hundred thousand children this year alone could miss out on a hugely valuable payment as they enter adulthood and independence.

How much could my Child Trust Fund be worth?

Even an unclaimed Child’s Trust Fund, containing no deposits other than the two minimum government contributions, will now have significant value thanks to 18 years of compound interest. Those receiving the lower level of contribution are worth nearly £1,000 by now, while the higher-contribution Trust Funds (given to children of poorer families) will hold nearly £2,000. If parents made additional deposits at any point, then the funds will be worth even more.

The most bitter twist of the Child Trust Fund saga is that around 80 per cent of these more valuable funds – i.e. those set up to help the least well off – have never been activated. The money is there and waiting to be accessed by those children when they reach adulthood, but the families may remain completely unaware that it exists.

Gavin Oldham, chairman and founder of The Share Foundation, called on today’s government to do more to inform those who are missing out. He said, ‘[This] is a life-changing amount of money to an 18-year-old. Tracing these funds could alter the prospects of a whole generation. But insufficient effort is being made to link families with their accounts.’

Onefamily CTF who manage Child Trust Funds decided to be more pragmatic and supportive in circumstances where a young person is Disabled and cannot access the Child Trust Fund themselves as problems were accruing around this . On being notified of the reason why a young person could not personally close their own account, where parents/carers were making it clear why the young person could not Onefamily Child Trust Fund account began ahead of any Government change enabled parents/carers to do it instead by seeking specified forms of identification and issuing to parents/carers in these circumstances declaration documents for them to complete, sign and send back to them accordingly.

Onefamily head of investments, Paul Bridgwater, said: ‘Every case is different, but in some circumstances it is possible to release the funds if sufficient proof of identification can be provided by the person responsible for managing the young person’s finances.

‘We aim to review each application sensitively and with compassion, and would encourage all customers who may be in this position to get in touch, so that we can give them all the support that they need.’

The parents /carers of as many as four in five Disabled young people unable to access their Child Trust Fund savings maybe now seeing a further shift and no longer having to go to court to get access to their child’s Child Trust Fund money after a way of avoiding the costly and time-consuming process was greenlit by savings providers too in February 2021. .

A majority of Child Trust Fund providers have now agreed to proposals first published in December 2020 which would allow the parents and guardians of Disabled young people who have up to £5,000 in their accounts and no other savings to access the money by filling out a five page application form and getting a medical practitioner to fill out another one page document.
Whilst this agreement and the shift forward for some children is welcome, for those falling outside of the agreement specifications it is still proving challenging and the pragmatism of Onefamily is needed in these circumstances too .

Do I really have a Child Trust Fund?

Yes! If you was born a UK citizen between the dates of 1 September 2002 and 1 January 2011, then a Child Trust Fund for you definitely exists somewhere. Note that children born between 1 August 2010 and 1 January 2011 will have received smaller government contributions, due to the cutbacks of the time. However, such ‘austerity Child Trust Funds’ should still be worth at least £70 after 10 years even if no parental deposits were made.

How do I trace a Child’s Trust Fund?

A Child Trust Fund the Government initially said can only be accessed by the child it is assigned to, once they turn 18 – parents/carers cannot access it on their behalf. However, as the above shows as a parent /carer you can still help your child to claim their fund. The first essential step is to trace the provider.

You can do this by going to the Government’s website of Child Trust Fund providers. Browse the list and see if you recognise your provider, whom you can then contact.

If you still can’t remember the name of your provider, or never knew you had one, then you can trace the fund directly at the Child Trust Fund website. Click the link under Find your provider and log in to the Government Gateway (if you don’t yet have an ID and password, click ‘Create sign in details’).

You will normally receive an initial response within 15 days, which may then ask you for further information such as a birth certificate or adoption certificate.

How long does it take to track down a Child Trust Fund?

Currently the system for tracing a lost or unclaimed Child Trust Fund can be quite cumbersome. Some parents have reported having to wait several months to track down the details so that the money can be released. It’s therefore worth starting the process now, even if your child won’t turn 18 for a while. The lockdown is a great opportunity to get the admin sorted out, and you know it will pay off in the end.

Once you know your money is on your way, you can choose a new savings account that can be accessed more easily.

If you don’t know or can’t remember who holds your / your child’s CTF, for more advice go to :