Child Trust Fund warning as Britons have £2,000 in untouched cash – how to claim

Martin Lewis provides advice on tracing a Child Trust Fund

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A Child Trust Fund (CTF) is intended to be a long-term tax-free savings account for children, first introduced by the Government in 2005. The programme helped children born between September 1, 2002 and January 2, 2011 – many of whom will now be teenagers or adults. Research from the Association of Financial Mutuals (AFM) has estimated more than 300,000 teens are still to claim their funds.

This equates to some £600million of unclaimed cash which many Britons could get their hands on.

Around 46 percent of all those eligible are yet to claim their funds, AFM said, which are valued on average at more than £2,000.

This is better than the following months after the first fund matured, where unclaimed funds were recorded at 80 percent. 

But many teenagers and parents are unsure on how to claim and what to do with the money. 

READ MORE: Rishi Sunak warned many avoiding capital gains tax and inheritance tax

child trust fund UK 2021

Child Trust Fund warning as Britons have £2,000 in untouched cash – how to claim (Image: Getty)

In the meantime, the money is invested in either a cash fund or a stocks and shares account.

Ultimately, it will be up to the account holder of the CTF to decide what they do with the money.

Their options are to withdraw the amount, leave it in the fund, or to reinvest the money into other savings products. 

Martin Shaw, CEO of the Association of Financial Mutuals, also offered advice for those looking to continue to invest their savings.


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Firstly, he said, a Lifetime ISA (LISA) could be a sensible option, intended to help 18 to 39 year olds.

The tax-free accounts can help savers to get a 25 percent top up from the Government, worth some £1,000 per year.

But individuals should be aware this type of account is only intended for those saving for a first home, or for their retirement.

Finally, people may wish to “dip a toe” into the world of investing through a stocks and shares ISA.

child trust fund HMRC

Child Trust Funds: Britons have other savings options (Image: Getty)

These come with a higher risk than cash ISAs, but could offer a chance for a better return.

Individuals should always be aware, however, they could get less back than they originally put in.

Mr Shaw stressed that when searching for a stocks and shares ISA it is worth shopping around.

This can ensure the provider’s portfolio aligns with the values of the saver, if they so wish.

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For example, ethical or green investment is becoming increasingly popular amongst younger people.

Teenagers should have received letters telling them how they can claim the money. 

The money belongs to them, and individuals can only take it out upon reaching the age of 18.

There is no tax to pay on the CTF income or any profit it makes overall. 

William Murphy

William Murphy

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