If you were born in the UK between 1 September 2002 and 2 January 2011, there’s a real chance you’ve got money sitting in an account you’ve never seen. It’s called a Child Trust Fund (CTF), and billions of pounds remain unclaimed.
What is a Child Trust Fund?
A Child Trust Fund is a long-term savings or investment account set up for children born in the UK during a specific period. The government designed it to give you a financial head start when you reach adulthood.The account is opened in your name and stays locked until you turn 18. At that point, the money becomes yours.
You’ll usually find one of three types:
- Cash CTFs – similar to a standard savings account, earning interest
- Stakeholder CTFs – investment accounts with capped charges and spread risk
- Shares-based CTFs – investment accounts with potentially higher returns (and higher risk)
Family members could contribute to the account over time and any money invested is exempt from income and capital gains tax.
Why were Child Trust Funds introduced?
The government launched Child Trust Funds in 2005 to encourage long term saving habits. The idea was to give every child, regardless of background, a small financial foundation. When your account was opened, the government added an initial payment (typically £250 or £500 for lower income households). Some children also received a second payment later on. By the time you turned 18, that contribution, plus anything added by family, could grow into a meaningful lump sum.
Who was eligible?
You were eligible for a Child Trust Fund if:
- You were born between 1 September 2002 and 2 January 2011, and
- Your parent or guardian claimed Child Benefit for you
If your parents or guardians didn’t open an account themselves, the government opened one on your behalf. That’s why many people don’t realise they have one, it may have been set up automatically.
Why did Child Trust Funds stop?
Child Trust Funds were phased out in 2011. At the time, the government decided the scheme was too costly to continue, particularly during wider spending cuts following the financial crisis.
Child Trust Funds were replaced by Junior ISAs (JISAs). They work in a similar way but without any government contribution. If you already have a Child Trust Fund, you can’t open a Junior ISA alongside it, but you can transfer your CTF into a Junior ISA if you want different investment options or potentially better rates.
What happens when the account matures?
When you turn 18, your Child Trust Fund matures and you take full control. At that point, you can withdraw the money, leave it where it is or transfer it into an adult ISA. If you don’t take action, the account remains open and continues to hold your money, often with low interest or limited growth.
How to check whether you have a Child Trust Fund
If you’re unsure whether you have a Child Trust Fund, start by speaking to your parents or guardians, they may still have paperwork or remember which provider was used.
If that doesn’t help, you can use HMRC’s free tracing service. You’ll need:
- Your National Insurance number
- Your date of birth
- Your address
HMRC will confirm whether you have a Child Trust Fund and tell you which provider holds it.
If you were born during the qualifying years, you could have a Child Trust Fund holding hundreds or even thousands of pounds. It takes a few minutes to check and finding it could be worth your while.
This article is for general information only and isn’t intended as financial advice. You should consider your own circumstances and, if necessary, seek independent financial advice before making decisions about your money.
If you have any thoughts on this topic, or any consumer issues you would like us to cover, feel free to get in touch at support@resolver.co.uk.
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