Child Trust Funds were introduced by the Labour Government in 2005 as a long-term tax efficient savings account for children. All children born in the UK between 1 September 2002 and 2 January 2011 who were eligible for Child Benefit were set up with a Child Trust Fund (CTF).
HM Revenue and Customs issued an initial £250 voucher to enable parents to set up a fund for their child and a further £250 voucher was issued when the child reached 7 years old. A third of trust funds were set up by HMRC on behalf of eligible children because parents and guardians had failed to do so within one year of receiving the initial voucher.
Contributions up to a maximum of £9,000 per year can be made to the CTF until the child reaches the age of 18. Once the child reaches 18 years old, the CTF matures.
While no further funds can be added the CTF will stay in existence until the funds are withdrawn or transferred to an adult ISA.
It is estimated that 6.3 million Child Trust Funds were set up between 2002 and 2011 with the Government investing more than £2 billion. The first trust funds matured in 2020 but thousands of funds that have matured have never been claimed. Even if no extra funds were added after the initial government contributions it is likely that a Child Trust Fund will now be worth approximately £1000.
If you or your child have lost track of your Child Trust Fund don’t panic. If you are a parent or guardian of a child under the age of 18 or if you are 16 or over and are looking for your own trust fund, then you can ask HMRC to find a Child Trust Fund either by completing an online form or by writing to HMRC and giving the child’s full name, address and date of birth and their National Insurance Number. If you enquire via the online form, you will be required to set up a Government Gateway to enable you to do this.
For full details about Child Trust Funds go to https://www.gov.uk/child-trust-funds
Carol Draper FCCA
Clifton-Crick Sharp & Co Ltd
