Thousands of young adults across the UK could be missing out on savings they don't even know exist.
Although almost three million Child Trust Funds (CTFs) have now been claimed or transferred into ISAs, approximately 827,000 matured accounts remain unclaimed, with an average value of £2,310 each.
That represents more than £1.9 billion in savings potentially waiting to be reunited with their rightful owners.
Child Trust Funds were introduced for children born between 1 September 2002 and 2 January 2011, with the government providing an initial contribution to help families build savings for their child's future.
Even where parents did not open an account themselves, HMRC arranged for one to be opened on the child's behalf. Additional government contributions were also made for children who turned seven by 31 July 2010.
As a result, some young adults may have savings accounts they or their parents have never actively managed.
Changes within the financial services sector have added to the problem. Some original CTF providers have merged or left the market, meaning accounts may now be held with a different organisation.
Young people can take control of their Child Trust Fund from age 16, although the money cannot normally be withdrawn until they turn 18.
Before maturity, transferring funds into a Junior ISA may be worth considering, particularly where better interest rates or investment options are available.
Once the account holder turns 18, the funds become accessible and can be withdrawn or retained within an adult ISA, preserving their tax-free status.
However, there is no requirement to withdraw the money immediately. Depending on individual circumstances, keeping the funds invested or saved could provide a useful foundation for future financial goals.
If you know which bank, building society or investment provider holds the account, you can contact them directly.
If the provider is unknown, HMRC offers a free online tracing service for parents and guardians or young people aged 16 and over looking for their own account.
The process takes around five minutes and requires the account holder's National Insurance number and date of birth. HMRC will normally provide details of the account provider within three weeks, although it cannot confirm the balance.
With the oldest Child Trust Funds having matured more than six years ago, there could be many young adults who have simply overlooked money that belongs to them.
An average balance of £2,310 may not be life-changing, but it could provide a welcome contribution towards university costs, a first home or longer-term savings.
For parents, grandparents and young adults, checking whether a Child Trust Fund exists is a simple exercise that could prove worthwhile.
Once located, it is also worth reviewing where the money is held and whether the account remains suitable. Comparing interest rates, investment options and available ISA allowances can help ensure those savings continue to work effectively.
If you or someone in your family was born between September 2002 and January 2011, it is worth checking whether there is an account waiting to be claimed.
You can use HMRC's free Child Trust Fund tracing service here:
Find a Child Trust Fund – GOV.UK
All data and figures referred to in our news section are correct at the date of publishing and should not be relied upon as still current.
