An estimated 758,000 young people across the UK have large sums of money stashed away in Child Trust Funds that remain unclaimed, according to new government data
Families up and down the country could be missing out on tens of thousands of pounds in lost bank accounts, it has been revealed.
An estimated 758,000 young people are said to have large sums of money stashed away in Child Trust Funds that are currently unclaimed. This was revealed in newly-released government data.
The average pot yet to be cashed-in sits at a mouth-watering £1,980, but there could be even more hidden away. In the UK, there are around 27,000 unclaimed Child Trust Funds worth in excess of £10,000, while a further 280,000 accounts have more than £1,000, and 57,000 contain £5,000.
An urgent reminder has now been issued to people between the ages of 18 and 23 to check if they have any potentially lost accounts. The government claims hundreds of thousands of people could be sitting on a huge savings pay-out without even realising it with approximately £1.5 billion sitting in unclaimed Child Trust Funds.
Child Trust Funds are tax-free savings accounts set up for children born between September 1, 2002 and January 2, 2011. The scheme closed in 2011 but people can still access the money from their accounts.
Rules dictate that once the child turns 16, they take control of everything the account holds. It then matures by the time they turn 18, then they can decide whether to invest or withdraw the money.
The government had given parents an initial deposit of £250 around the time of the scheme. With interest and investment growth, these sums of money may very well have ballooned to potentially life-changing amounts.
“Many lost Child Trust Funds will be because parents and children aren’t even aware they have the account, don’t know which provider the money is with or how to track it down,” Charlene Young, senior pensions and savings expert at AJ Bell, told The Sun.
“Over a quarter of accounts were set up by the government because parents failed to do so within a 12-month window.”
Be warned, you may also be paying out extra charges as a result of failing to claim your Child Trust Fund account. Various providers are charging lump sums for managing these accounts, with many said to be charging 1.5% annually.