HUNDREDS of thousands of teenagers are missing out on £1,500 each in lost child trust funds as pots of cash go unclaimed.
The Sun can reveal that 114,000 teens have not touched their child trust funds (CTFs), with a total of £171million held in these accounts, according to data from Hargreaves Lansdown.
Child Trust Funds (CTFs) are a government initiative for children born between September 1, 2002 and January 2, 2011.
Under the scheme, parents and guardians received a voucher to deposit into a CTF account on behalf of their child when the account was set up.
Vouchers were worth between £50 and £1,000 depending on when the child was born, as well as whether parents were on a low income at the time.
CTFS were replaced by Junior ISAs in November 2011, so you can’t get one now.
Each account is worth an average of £1,500.
You can’t access the cash until you turn 18, so teenagers were first allowed to access money from their accounts from September 1 last year.
By September 1 this year, there will be a total of £1.08billion worth of cash that can be accessed by this point, Hargreaves Lansdown says.
But it estimates £171.4million worth of cash across 114,000 accounts has been lost.
This is because an estimated one in six people either didn’t know where their money had been invested, or had forgotten they had existed.
Personal finance analyst Sarah Coles said: “Over 114,000 of them are likely to be completely in the dark about their CTF, and their parents won’t know where this money is either.
“[Around] 30% of parents didn’t make a decision about where to put the money, so HMRC invested it for them in a stakeholder account, and they may never have realised where the money went.
“Even if they did choose where to put the money, there’s a chance that house moves in the intervening years mean they’ve lost touch with it.”
Most people can fill in this online form via the Gov.uk website to check if they have a lost account.
You will need a Government Gateway user ID and password. If you do not have a user ID, you can create one when you fill in the online form.
If you’re a parent looking for your child’s account, you’ll either need your child’s Unique Reference Number – you’ll find this on your annual CTF statement – or their National Insurance number.
If you’re looking for your own trust fund, you’ll just need your National Insurance number.
This is normally sent automatically in the three months before a person’s 16th birthday, but you can track it down via Gov.uk if you’ve lost it.
Once the form is complete, HMRC will send you details of the CTF provider by post within three weeks.
HMRC will contact you for more information if you’ve adopted the child or a court has given you parental responsibility for them.
Once you’ve tracked down your lost CTF, there are a number of things you can do.
You could cash it in, and ask your CTF provider to hand over the money and get it paid into your current account.
However, if you do this, you might have to pay tax on interest on this cash in the future.
But for most people their personal savings allowance and capital gains tax allowance will be enough to protect any gains from tax in the short-term.
You could also transfer it to an ISA – either a cash, stocks and shares, innovative finance or a lifetime ISA.
Any transfers won’t count towards the annual ISA subscription, so that means whatever sum you transfer you’ll still be able to put up to an additional £20,000 into your ISAs in total in the current tax year.
Any transfers to a Lifetime ISA will count towards the £4,000 annual limit though.
If you do nothing with the money your CTF provider will either transfer it to an ISA, if they offer one, or they’ll transfer it into a ‘protected account’, where it still won’t incur income or capital gains tax and it will sit until the account holder does something with it.
Claiming the money may be difficult, however, as the CTF providers often ask teens for proof of address such as utility bills and council tax statements, which most teens don’t yet have.
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