How to check if you’re due money from a Child Trust Fund - and how to find a lost account
Thousands of teenagers are expected to enjoy a windfall this month, as Child Trust Funds begin to mature.
If your child currently has a Child Trust Fund, or if you’re turning 18 and would like to access your fund, or if you think you have a lost fund, here’s everything you need to know.
What is a Child Trust Fund?
A Child Trust Fund (CTF) is a long-term tax-free savings account for children.
However, as the Gov.uk website explains: “You cannot apply for a new Child Trust Fund because the scheme is now closed. You can apply for a Junior ISA instead.”
If you already have a Child Trust Fund, then you can continue to add up to £9,000 a year to your CTF account.
The money then belongs to the child and they can only take it out when they’re 18. However, they can take control of the account when they’re 16.
“There’s no tax to pay on the CTF income or any profit it makes. It will not affect any benefits or tax credits you receive,” adds Gov.uk.
This government initiative was for children born between 1 September 2002 and 2 January 2011, and under the scheme parents and guardians received a voucher which they could deposit into a CTF account on behalf of their child.
These vouchers were worth between £50 and £1,000 - depending on when children were born - alongside whether parents were on a low income at the time.
These vouchers then needed to be added to special CTF accounts, with parents able to choose between a cash or stock and shares version.
How much money is in the account depends on what children initially got from the government, and if money was saved in a cash account or a stocks and shares account.
When the child turns 18, they take over the account and can take out the money.
How many people have Child Trust Funds?
According to HM Revenue and Customs (HMRC), around 6.3million child trust funds have been set up since their launch in 2002.
Around 4.5million of these funds have been opened by parents or guardians, but 1.8million have also been set up by HMRC when parents failed to do so, meaning that these children could receive a surprise sum of money.
The first 55,000 CTF holders are turning 18 in September, which means that they can access the money for the first time.
HMRC expects around 700,000 accounts to mature each year.
Under new rules, banks and building societies will be allowed to move money from a lost CTF into an Isa account if they haven't heard from the parent or account holder before they turn 18.
How can I find a lost Child Trust Fund?
Even if you do not know the provider, you can still find out where a CTF is held.
You will need to fill in the form online in order to ask HMRC where the account was originally opened.
You’ll 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 trust fund, you’ll need either:
the child’s Unique Reference Number (you’ll find this on your annual CTF statement)their National Insurance number
If you’re looking for your own trust fund, you’ll need your National Insurance number.
HMRC will then send you details of the Child Trust Fund provider by post within three weeks of receiving your request.
HMRC will also contact you for more information if you’ve adopted the child or a court has given you parental responsibility for them.
For children in care, Gov.uk explains: “Some children looked after by local authorities have a Child Trust Fund (CTF) account set up on their behalf. The Share Foundation acts as the registered contact for these accounts.”
A version of this article originally appeared on our sister title, Sunderland Echo.