An estimated £1.4 billion in unclaimed Child Trust Funds belonging to 728,000 people could be claimed now they have turned 18, according to The Share Foundation. The average value of these funds is said to be around £2,000 due to growth over the years and additional payments from family and friends. However, many are unaware the accounts even exist. Campaigners from The Share Foundation are calling for automatic payouts to be made for lost accounts – those where no action was taken by parents or carers after receiving the initial voucher from the government.
Latonya Skye-Paterson is one of 6.3 million people born between September 2002 and January 2011 with a child trust fund, which is a long-term tax-free savings account designed to last until it’s 18th birthday. Latonya only learned she had a Child Trust Fund when a college tutor suggested she check online. When she did, she discovered she had £955 in hers. Latonya is backing the call for automatic payouts.
The campaigners’ proposal is to have “default withdrawal at 21”, which would cover accounts where no action was taken by parents or carers to set up a trust fund after being sent the initial voucher from the government. Such “HMRC allocated accounts” number 449,000 and are worth £927m. These funds could be automatically paid to the account holders via their National Insurance numbers if they are not claimed by the time they turn 21 and this would be done via PAYE payslips, benefits or student loans to trace the account holders.
Sir Geoffrey Clifton-Brown, who is an MP and also chairs Parliament’s Public Accounts Committee, supports the automatic payout idea, likening the unclaimed money to a buried treasure trove. Speaking on BBC Radio 4’s Money Box, he said that recipients of the funds required more assistance from the Government rather than expecting the poor beneficiaries to “go and find this money”. Sir Geoffrey admitted that the proposal was a complex one but said he’d press the Treasury and HMRC for more action next time they appeared in front of the Public Accounts Committee.
HMRC said that the scheme was “complex and could not be easily implemented” but added that they were committed to reuniting all young adults with their CTFs and recognising the importance of ensuring that young adults benefited from these funds as they reached adulthood
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