Unclaimed child trust funds now total over £1.5 Billion

Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances

The value of the investment and the income from it can fall as well as rise and investors may not get back what they originally invested, even taking into account the tax benefits.

Investors do not pay any personal tax on income or gains, but ISAs may pay unrecoverable tax on income from stocks and shares received by the ISA managers.

Stocks and Shares ISAs invest in corporate bonds, stocks and shares and other assets that fluctuate in value.

Tax treatment varies according to individual circumstances and is subject to change.

The Financial Conduct Authority does not regulate tax advice.

HMRC’s latest statistics show a jump in unclaimed Child Trust Funds (CTFs) to over £1,500,000,000.

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.

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.

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.

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.

Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances

The value of the investment and the income from it can fall as well as rise and investors may not get back what they originally invested, even taking into account the tax benefits.

Investors do not pay any personal tax on income or gains, but ISAs may pay unrecoverable tax on income from stocks and shares received by the ISA managers.

Stocks and Shares ISAs invest in corporate bonds, stocks and shares and other assets that fluctuate in value.

Tax treatment varies according to individual circumstances and is subject to change.

The Financial Conduct Authority does not regulate tax advice.