HMRC’s latest statistics show a jump in unclaimed Child Trust Funds (CTFs) to over £1,500,000,000.
WHAT ARE CHILD TRUST FUNDS AND WHY WERE THEY DISCONTINUED?
The government paid £2 billion into accounts for 6.3 million children born between
1 September 2002 and 2 January 2011, to which parents and others could add a top-up, initially of no more than £1,200 a year. This has since risen to up to £9,000 a year. In reality, most CTFs were funded with a single government payment of around £250, with a second £250 if the child reached age seven before 3 January 2011, when the government funding ended (although CTFs continued to exist).
Those payments took the form of a voucher, sent to the child’s parent or guardian, and were frequently ignored – leading to a high proportion of HMRC-opened CTFs. With hindsight, the default rate was an omen of the potential problems that would arise when CTFs matured at age 18.
HMRC DATA: HUNDREDS OF THOUSANDS OF CTFS REMAIN UNCLAIMED
The latest report from HMRC shows that as at 5 April 2025, there were 758,000 matured CTFs not claimed or transferred, over 60% of which had matured more than a year previously. The average value of the unclaimed plans was around £2,000, but some 27,000 plans had a worth of £10,000 or more.
HOW TO TRACE A CHILD TRUST FUND
To trace a CTF, the first port of call is the HMRC locator tool that can supply the name of the CTF provider, but not the CTF’s value.
SHOULD YOU TRANSFER A MATURED CTF TO AN ISA?
A matured CTF enjoys the same tax freedom as ISAs beyond age 18. However, if continued investment is the goal, it still makes sense to review the option of a transfer to a new ISA, which will probably offer a greater investment choice and potentially have lower charges.
