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£1bn unclaimed: are you owed cash from a child trust fund?

One in six child trust funds registered as 'missing'

Around £1bn worth of savings from child trust funds is currently waiting to be claimed, new research shows – so how can you trace your missing savings?

New figures from The Share Centre revealed that one million child trust funds, worth around £1,000 each, are registered as ‘addressee gone away’.

This means that the accounts are considered lost and no longer linked to the registered account holder.

We explain how to trace a child trust fund and whether or not you should transfer the savings into a junior Isa.


What is a child trust fund?

Child trust funds are a tax-free savings account offered to children born between 1 September 2002 and 2 January 2011. No new funds were offered after January 2011, though those that already existed remain open.

Child trust funds were introduced to encourage parents and guardians to save for their children’s futures, with the government making a contribution of £250 to each child’s account.

Families in receipt of child tax credits received an additional £250.

The accounts allow you to save up to £4,620 a year, which starts on the child’s birthday and ends the day before their next birthday.

Anyone can deposit into a child trust fund. The child named on the account can opt to manage the account from the age of 16 and can officially access their money from the age of 18.

Child trust funds were also set up for children who were looked after by local authorities. In these cases, the Share Foundation acts as the registered contact for the account until the child reached 16.

Once a popular way of saving, child trust funds fell out of favour with parents due to their poor interest rates and high investment costs.

Tracing a lost child trust fund

Almost one in six child trust funds is currently registered as ‘missing’, with many parents opening accounts but failing to keep their details up-to-date over the years.

If you think you’ve lost a child trust fund account, tracking it down couldn’t be easier.

All you’ll need to do is submit a request via GOV.UK.

To do this, you’ll need a Government Gateway ID, which only takes a few moments to create.

Once signed in, you’ll be asked if you’re the parent, guardian or the child the account belongs to.

After submitting your request, you’ll normally receive a response within 15 days.

Junior Isas the next generation of saving

In 2011, child trust funds were discontinued and replaced by Junior Isas.

A Junior Isa is a tax-free way of saving for children under the age of 18.

Like child trust funds, anyone can pay into a junior Isa and for the 2018-19 tax year a maximum contribution of £4,260 can be deposited.

There is no personal income tax or capital gains tax to pay of any growth in a junior Isa either.

For more information on how junior Isas work, check out the short video below.

Transferring your child trust fund to a junior Isa

Since 6 April 2015, parents and children over the age of 16 have been allowed to transfer child trust funds into junior Isas.

This came as a welcome relief, as junior Isas offer higher interest rates and a wider variety of account providers.

Before transferring your child trust fund into a junior Isa, it’s important to check the value of your account and whether there are any exit fees or guarantees that might be lost if you switch away.

Once you’ve decided that transferring is the best next step, you’ll need to choose an Isa provider.

Shopping around can really help you compare offers, so it’s worth trying to find the best junior cash Isas if you want top savings or the best stocks and shares Isa if you’d prefer to invest.

Switching to a junior Isa should take about 30 days.

For tips on finding the best provider, check out our guide on junior Isas.

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