CASH HAPPY
Parents warned to check hidden bank accounts as thousands owed up to £2,200 in unclaimed cash – are you eligible?
Scroll down to find out if you could claim cash
THOUSANDS of young people are thought to be missing out on an average of £2,200 which is being held in forgotten bank accounts.
Child Trust Funds are long-term, tax-free savings accounts which were set up for every child born between September 2002 and January 2 2011.
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It is thought that £1.4billion belonging to 728,000 young people is sitting in Child Trust Funds just waiting to be claimed.
But many don't know their accounts exist, or that they are can withdraw cash from them.
HMRC urged parents to check if their children were eligible in a post on X.
HMRC wrote: "If your child is between the ages of 18 and 22, they can cash in their #ChildTrustFund.
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"The average amount claimed is £2,200.
"Find out more ."
If you're not sure if you have a Child Trust Fund you can check on HMRC's website - all you need is your full name, address, date of birth and National Insurance number.
And if you're a parent looking for your child's account all you need is their full name, address and date of birth.
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Once you fill in your details HMRC should send you a letter with information about your account within three weeks.
What is a Child Trust Fund?
Child Trust Funds are long-term, tax-free savings accounts which were set up for every child born between September 2002 and January 2 2011.
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The Government deposited £250 for every child during that time period, or £500 if they came from a low income family earning around £16,000 a year or below.
An extra £250 or £500, depending on their families' economic status, was deposited when the child turned seven.
In 2010, this was reduced to £50 for better off households and £100 for those on a lower income.
The scheme was eventually scrapped in 2011 as part of cost-cutting measures following the 2009 financial crisis and was later replaced with Junior ISAs.
Currently, parents or friends can deposit up to £9,000 into the child's account tax-free, with the money usually invested into shares.
However, many parents did not continue to add money to the accounts after the scheme was scrapped and that led to accounts being lost or forgotten.
It is important to note that savings in these accounts are not held by the Government but are held in banks, building societies or other saving providers.
The money stays in the account until it’s withdrawn or re-invested.
Young people can take control of their Child Trust Fund at 16, but can only withdraw funds when they turn 18 and the account matures.
What to do once you have claimed the money
Usually, people put the cash straight into a bank account, invest it, or transfer it into an ISA.
You can also ask your Child Trust Fund Provider to give you the money and get it cashed into your bank account.
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This way you'll need to share the bank account details you wish to transfer the cash into with HMRC.
But if you'd rather invest it, you can transfer it into an ISA.
LOST CASH
By Charlene Young, pensions and savings expert at AJ Bell
MANY parents and children aren’t aware they even have the account, or don’t know who the money is with or how to track it down.
More than a quarter of CTF accounts were set up by the government because parents failed to do so within the 12-month window.
This highlights why so many are unclaimed – as the parents either weren’t aware or won’t remember that an account was even set up for their child, let alone where the money is now.
Any child born between 1 September 2002 and 2 January 2011 who hasn’t already got details of their account should track it down.
Once you’ve tracked down the money you can choose what to do with it. Your options are to transfer it to an adult ISA or withdraw the money. Until then your money will just sit in an account that no one else has access to, possibly paying very high charges.
Anything you transfer to an adult ISA at maturity will not count towards your annual ISA allowance, which is £20,000 for over 18s.
For many young people who have CTFs but are still under 18, it will make sense to transfer it to a Junior ISA, where the charges will likely be lower, and you’ll have a much bigger investment choice.
The money will still be locked up until you turn 18, but the tax-free benefits of ISA investing still apply. You can transfer the entire CTF into a Junior ISA and still add up to £9,000 to it in the same tax year.
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