Is there a £2,000 forgotten pot of money waiting for you or your child? Here’s how to find out...

Who doesn’t like free money? Or being reunited with lost money? Or finding out that there’s a pot of money with your name on it that you didn’t even know existed?

Personally, I like it very much. And as a money coach, I love being able to connect people with their free, lost or unknown money – especially young people. Enter Child Trust Funds.

If you’re aged between 18 and 22 – or a parent or guardian of someone in this age bracket – there may be a lost or forgotten Child Trust Fund waiting to be claimed.

According to HMRC figures released this week, 671,000 matured Child Trust Funds haven’t been claimed, containing savings worth £2,082, on average, per account.

That’s more than half a million young adults missing out on more than £2,000 each – money designed to give them a financial boost at a time when they need it most.

Many eligible teenagers who have yet to claim their savings might be starting university, apprenticeships or first jobs.

Child Trust Funds are tax-free savings accounts that were set up for children born between 1 September 2002 and 2 January 2011.

To get the account started and encourage future saving, the UK government provided an initial deposit of £250. Families could add their own contributions to help the savings pot grow.

Children in low-income households or cared for by the local authority received an additional payment.

Parents and guardians were sent a voucher to open an account. If an account wasn’t opened by a child’s first birthday, HMRC opened an account in the child’s name.

On the child’s 18th birthday, the Child Trust Fund matures, and they can access the account and withdraw the money.

If the young person doesn’t withdraw the money, it stays in the account and no one else has access to it.

The first Child Trust Funds matured on 1 September 2020. If a young person turned 18 on or after this date and hasn’t accessed the money, it’ll still be sitting there – like the 671,000 young adults currently missing out on more than £2,000 each.

Child Trust Funds are held by different providers. Each year, providers should send a statement with the value of the account to the registered contact – typically parents and guardians.

However, many registered contacts have lost touch with Child Trust Funds. Reasons for this range from moving house to accounts being set up by HMRC on a child’s behalf and families not necessarily being aware of this. Around 28 per cent of the total 6.3 million accounts were opened by HMRC.

Your Child Trust Fund provider will be a bank, a building society, or another savings provider.

If you don’t know who your Child Trust Fund provider is, visit this link and complete an online form to find out.

The Share Foundation also offers a free Child Trust Fund search facility, and has so far helped 65,000 young people claim their accounts, worth more than £125m in total.

The Share Foundation is a registered charity and administers Child Trust Funds on behalf of the Department for Education for young people in care.

The charity has proposed a “Default withdrawal at 21” scheme to the UK government, to connect young people – particularly those from low-income backgrounds who may not know they have an account – with their money.

Gavin Oldham, chair of trustees at the Share Foundation, said: “Our proposal is straightforward: to link the national insurance number on the Child Trust Fund account in order to enable its young adult owner’s money to be delivered directly through the benefits, payroll, or student loan systems.

“This way, the money can be used as intended: to provide resources to help young people make a successful start to adult life.”

Jayden Brown, 21, from Bristol, is studying computing and was “happy” to find out there was a savings pot for him when he turned 18. (Full disclosure: Jayden is family, and I was the one to tell him. No point helping people with money if you don’t help those closest to you.)

Jayden said: “I hadn’t heard of the Child Trust Fund until Talia told me about it just before I turned 18. I then spoke with my mum about it, and we tracked down my account. There was £1,500 in there.

“I was happy about it. I’d never had that much money before and I knew what I wanted to do with it. I was able to buy the parts to build my first PC. The money helped me do something I’m interested in – computers – and is connected to the work I want to do.”

Family finance expert and founder of Hoops Finance, Funmi Olufunwa, added: “Parents often think about ways of saving for their children, but many have accounts they’ve forgotten about, like the Child Trust Fund.

“My niece had an account. Her parents were open with her about it, and she developed a savings habit. Her pocket money, birthday money and pay from her part-time job went into it. My niece called it her ‘big girl fund’ and bought a moped and then a car with the money she’d saved. She’s 19 now and at university.”

Whether you’re a parent, guardian, extended family member, educator, employer or friend, let’s spread the word about Child Trust Funds and get unclaimed monies claimed.

We all have a role to play in closing the financial education gap and helping young people develop the knowledge, skills, attitudes and behaviours to make informed financial decisions and manage money well.

Talia Loderick is a money coach who helps people to understand and take control of their finances. Her website can be found here