Millions of 21-year-olds across the UK are currently receiving letters from the Government reminding them about their Child Trust Funds (CTFs), which could be worth an average of £2,200. These letters aim to help young adults locate and access these long-forgotten savings accounts, which were set up for every child born between 1st September 2002 and 2nd January 2011.
The initiative comes as many of the original beneficiaries are now reaching adulthood and are eligible to access their funds. HM Revenue & Customs (HMRC) estimates that over 6.3 million CTFs were opened, with a significant number remaining unclaimed or unaccessed by their owners. The letters, sent by HMRC, provide details on how individuals can track down their fund if they are unsure where it is held.
To combat potential scams, HMRC has also issued clear guidance on how recipients can verify the authenticity of these letters. Genuine letters will include specific details and direct individuals to official Government websites or helplines, rather than asking for personal banking details directly or requesting immediate action via suspicious links. This proactive measure is crucial given the rise in financial scams targeting individuals.
Child Trust Funds were designed to provide a financial boost for children as they became adults, with the Government initially contributing at least £250 to each fund. Parents, guardians, or even other family members could also contribute up to £9,000 annually. Upon turning 18, beneficiaries gained full access to their funds, which could be withdrawn, transferred into an adult ISA, or left invested. The current campaign targets those turning 21, as many may still be unaware of their entitlement or the location of their fund.
The Labour Party has previously highlighted the importance of ensuring young people are aware of and can access their CTFs, advocating for better communication and support for beneficiaries. Shadow Chancellor of the Exchequer, Rachel Reeves MP, has often stressed the need for financial education and accessibility to help young people make informed decisions about their savings and investments.
For those who have received a letter, or believe they are eligible but haven't, the first step is to use the HMRC online tool to find the provider of their CTF. This tool requires the individual's National Insurance number and can help reunite them with their savings. Once the provider is identified, the beneficiary can then contact them directly to discuss their options, whether that's withdrawing the money, transferring it, or continuing to invest it.
Source: HM Revenue & Customs