As much as £600m could be lying unclaimed in forgotten Child Trust Funds (CTFs), according to stockbroker The Share Centre. CTFs were introduced in 2002 by the government as a way to encourage long-term saving for children.
Parents or guardians of children born between September 2002 and January 2011 received a voucher from HMRC worth £250 (or £500 if they were receiving child tax credits). Those who did not respond had an account set up for them automatically by HMRC.
Digital radio station Share Radio launched a campaign last month to reunite account holders with their cash, claiming that almost 900,000 CTFs (one sixth of the total) were going unclaimed.
The unclaimed accounts were either set up by HMRC or are no longer assigned to an up-to-date address (ie, the parents have moved without updating their details). If you think that your child may have been provided with a CTF, you can track it down using HMRC’s “Where’s my Child Trust Fund” online tool, by inputting your address and child’s details.
If it turns out that your child does have a CTF – whether previously unclaimed or not – you should consider switching the funds into a Junior Isa (Jisa). These replaced CTFs in 2011, and the option to switch became available from last year.
Both are tax-free accounts and both types of account allow contributions of up to £4,080 per year, but Jisas – which have been embraced far more enthusiastically by the investment industry – offer a wider range of investment options, better rates, and more importantly, lower management fees.