You could be sitting on £2,000 in savings without even knowing it, and according to new research, hundreds of thousands of young adults may have a forgotten Child Trust Fund waiting to be claimed.
Around 760,000 matured accounts are still unclaimed, and the average account is worth around £2,000, meaning some people could have a sizeable savings pot in their name without realising it exists.
Analysis by thimbl of Financial Conduct Authority figures suggests the unclaimed accounts could collectively be worth approximately £1.52 billion.
But there is a sting in the tail for anyone trying to track down their money, with the FCA warning that some tracing companies have charged people £400 to locate their Child Trust Fund.
That fee would swallow 20% of an average £2,000 account.
The good news is that young adults do not need to pay a company to find their money. HMRC provides an official tracing service that can be used for free.
You could have one without knowing it
Child Trust Funds were long-term, tax-free savings accounts set up for eligible children.
Around 6.3 million Child Trust Funds were opened for children born between 1 September 2002 and 2 January 2011.
In some cases, parents or guardians opened the account, while HMRC could create one automatically if they did not.
Joe Lytwyn, personal finance expert at Thimbl.com, said: “Around 6.3 million Child Trust Funds were opened for children born between 1 September 2002 and 2 January 2011, but HMRC estimates that approximately 760,000 matured accounts remain unclaimed.
“That means roughly one in eight of the accounts originally created could still be waiting to be accessed.
"With an average value of around £2,000, these unclaimed funds could collectively be worth approximately £1.52 billion.”
That means people who have already turned 18 could potentially have money waiting for them, even if they have no memory of a Child Trust Fund being opened.
Why people may have forgotten
For many young adults, the account may simply have been forgotten over the years.
Parents may have opened a fund when their child was young, while others were created automatically by the Government.
Families may also have moved house or changed their contact details during the years the account was growing, making it harder for providers to get in touch when the account holder turned 18.
Lytwyn said: “Many young adults may not know that an account was opened for them. If a parent or guardian did not set one up, the Government could open an account on the child’s behalf, meaning some families may not remember which provider holds the money.
“Over a period of nearly two decades, families may also have moved home or changed contact details without updating the account provider.
"This could explain why some providers have been unable to contact account holders when they turn 18.”
Warning over £400 tracing fees
Young adults are also being urged to be careful before handing over part of their savings to a company claiming it can track down their money.
The FCA has warned that some firms, including companies advertising through social media, offer to trace or claim Child Trust Funds in return for a fee or a percentage of the money recovered.
In some cases, people have been charged £400 just to locate an account.
For someone with the average £2,000 Child Trust Fund, that would mean losing one-fifth of their savings.
Lytwyn said: “The FCA has highlighted cases where people were charged £400 simply to trace their Child Trust Fund. Based on the reported average account value of £2,000, that fee could remove around 20% of a young person’s savings.
“That is a significant amount to surrender for a service that can be accessed free of charge through HMRC’s official online tracing tool.
"Some firms may also charge a monthly subscription or take a proportion of the final payout, so it is important to understand any fees before agreeing to use one.”
Who should check?
Anyone born between 1 September 2002 and 2 January 2011 may have had a Child Trust Fund opened in their name.
The scheme is now closed to new applicants, but existing accounts continue to mature.
Once a Child Trust Fund holder reaches 18, they can take control of the account and access the money.
Younger account holders can also trace their fund before it matures.
Lytwyn said: “Anyone born between 1 September 2002 and 2 January 2011 may have had a Child Trust Fund opened in their name. Those who have already turned 18 can take control of and withdraw the money, while younger account holders can locate the fund before it matures.
“Even if a parent or guardian does not remember opening an account, it could still be worth checking because one may have been created automatically.”
How to find your Child Trust Fund
If you know which provider holds your Child Trust Fund, you can contact them directly.
If you do not know the provider, HMRC has a free online tracing service which can help identify where the account is held.
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Lytwyn said: “The official GOV.UK tracing service should be the first place to check. It is free, and HMRC can help identify the provider holding the account.
“You should also be cautious about unexpected texts or emails claiming to be from HMRC and asking for financial details. HMRC has said its current reminders are being sent by letter, so people should access the official service directly rather than following an unsolicited link.”
The FCA has also launched a review into Child Trust Funds, looking at issues including whether providers have successfully contacted young people when they turn 18, whether accounts offer fair value and whether vulnerable young adults face barriers when accessing their money.
The FCA is expected to report its findings in 2027.
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