HMRC has issued a new warning to millions of young people who could be missing out on £2,200 which is being held in a forgotten bank account.
Child Trust Funds are a type of long-term tax-free savings account that was set up for every child born between September 1, 2002 and January 2, 2011.
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It is thought that £1.4billion which belongs to 728,000 young people is sitting in Child Trust Funds waiting to be claimed.
But many young people do not know that the account exists or that they can now access the cash.
HMRC has now issued a warning on social media website X to people born between 2002 and 2011 to check if they have one of the accounts.
The post said: “Born between 2002 and 2011? You may have a #ChildTrustFund, which can be cashed in as soon as you turn 18.”
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You can check if you have a Child Trust Fund online by visiting: tax.service.gov.uk/guidance/ask-HMRC-to-find-a-Child-Trust-Fund/start/about-this-page
To do so you must be aged over 16 or a parent.
You will need your full name, National Insurance number, address and date of birth.
If you are a parent who is looking for your child’s account all you need is their full name, address and date of birth.
The tool will identify who your Child Trust Fund provider is.
It will not tell you how much money is in the Child Trust Fund.
Once you have completed the form you will get a letter from HMRC with details of the Child Trust Fund provider.
You will usually get this within three weeks of HMRC receiving your request, if you apply online.
Postal applications will take a little longer.
If you do not get a response within six weeks then write to HMRC.
What is a Child Trust Fund?
Child Trust Funds are long-term, tax-free savings accounts which were set up for every child born between September 1, 2002 and January 2, 2011.
The Government paid in £250 for every child during that time period, or £500 if they came from a low income family.
An extra £250 or £500 was paid in when the child turned seven, depending on their families’ economic situation.
In 2010, this was reduced to £50 for well off households and £100 for those on lower income.
The scheme was scrapped in 2011 and later replaced with Junior Isas.
Parents or friends can pay in up to £9,000 into the child’s account tax-free and the money is usually invested into shares.
But many parents did not continue to add money to the accounts after the scheme was scrapped and so many of the accounts were lost or forgotten.
The savings are held in banks, building societies and other savings providers, not by the Government.
The money stays in the account until it is withdrawn or re-invested.
Young people can take control of their Child Trust Fund at 16 but can only withdraw funds when they turn 18 and the account matures.
What should I do once I claim the money?
Most people put the cash into a bank account, invest it or transfer it into an Isa.
You can also ask your Child Trust Fund Provider to give you the money and get it paid into your bank account.
If you do this you will need to provide the bank account details you wish to transfer the cash into with HMRC.
If you would rather invest it, you can transfer it into an Isa.
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