Hundreds of thousands of teens missing out on £1,500 each in lost child trust funds – how to claim
HUNDREDS of thousands of teenagers are missing out on £1,500 each and are being urged to claim the cash
The Sun can reveal that 114,000 teens have not touched a pot of free cash from the government known as child trust funds (CTFs).
A total of £171million held in these accounts, according to data from Hargreaves Lansdown.
The government is now urging young people to claim these lost CTFs.
Around 55,000 of the accounts "mature" each month when teens turn 18, making the cash available for the first time.
Child Trust Funds 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 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.
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.
What can I do with a Child Trust Fund?
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.
Money expert explains how to give your kids a £2.1million pension pot by saving £8 a day.
READ MORE SUN STORIES
How saving £25 a month into a Junior cash Isa could set your child up with almost £11,000 when they turn 18.
There's even the chance to make your child a millionaire by the time they are 65.
We pay for your stories!
Do you have a story for The Sun Online Money team?
Email us at money@the-sun.co.uk