Hundreds of thousands of young adults could be missing out on savings collectively worth an estimated £1.52 billion, after the financial watchdog revealed that 760,000 matured Child Trust Funds remain unclaimed.
The Financial Conduct Authority (FCA) said the accounts have an average value of around £2,000, meaning a substantial pot of money could be sitting untouched by young people who are now entitled to access it.
Analysis by thimbl suggests the combined value of the unclaimed funds could be approximately £1.52 billion.
Around 6.3 million Child Trust Funds were opened for children born between September 2002 and January 2011. On the latest figures, roughly one in eight accounts created under the scheme could still be waiting to be accessed.
Joe Lytwyn, a personal finance expert at thimbl, said the scale of the unclaimed funds highlighted how many young adults may be unaware that money was set aside for them.
“Around 6.3 million Child Trust Funds were opened for children born between 1 September 2002 and 2 January 2011, but HMRC estimates that approximately 760,000 matured accounts remain unclaimed.
“That means roughly one in eight of the accounts originally created could still be waiting to be accessed. With an average value of around £2,000, these unclaimed funds could collectively be worth approximately £1.52 billion.”
Why are so many funds still unclaimed?
Child Trust Funds were introduced as long-term, tax-free savings accounts for children born during the scheme’s eligibility period.
Where parents or guardians did not open an account themselves, HMRC could arrange for one to be established on the child’s behalf.
That means some young adults may now have savings accounts they do not even know exist.
Lytwyn said: “Many young adults may not know that an account was opened for them. If a parent or guardian did not set one up, the Government could open an account on the child’s behalf, meaning some families may not remember which provider holds the money.
“Over a period of nearly two decades, families may also have moved home or changed contact details without updating the account provider. This could explain why some providers have been unable to contact account holders when they turn 18.”
The problem is particularly relevant to those who have recently reached adulthood, as Child Trust Funds become accessible when the account holder turns 18.
Warning over £400 tracing fees
The FCA has separately warned that some companies are offering to trace and claim Child Trust Funds in return for fees or a share of the money recovered.
In some cases, customers have been charged £400 simply to locate an account.
Against the reported average fund value of £2,000, that represents 20 per cent of the savings.
Some firms have also charged monthly subscriptions for what is ultimately a one-off tracing service.
Lytwyn said: “The FCA has highlighted cases where people were charged £400 simply to trace their Child Trust Fund. Based on the reported average account value of £2,000, that fee could remove around 20% of a young person’s savings.
“That is a significant amount to surrender for a service that can be accessed free of charge through HMRC’s official online tracing tool. Some firms may also charge a monthly subscription or take a proportion of the final payout, so it is important to understand any fees before agreeing to use one.”
Who could have a forgotten Child Trust Fund?
Anyone born between 1 September 2002 and 2 January 2011 may have had a Child Trust Fund opened in their name.
Although the scheme is closed to new applicants, existing accounts will continue to mature until 2029.
Lytwyn said: “Anyone born between 1 September 2002 and 2 January 2011 may have had a Child Trust Fund opened in their name. Those who have already turned 18 can take control of and withdraw the money, while younger account holders can locate the fund before it matures.
“Even if a parent or guardian does not remember opening an account, it could still be worth checking because one may have been created automatically.”
How to trace a missing fund for free
Those who know their Child Trust Fund provider can contact the company directly.
For anyone who does not know where their money is held, HMRC provides a free online tracing service to identify the provider.
Lytwyn said: “The official GOV.UK tracing service should be the first place to check. It is free, and HMRC can help identify the provider holding the account.
“You should also be cautious about unexpected texts or emails claiming to be from HMRC and asking for financial details. HMRC has said its current reminders are being sent by letter, so people should access the official service directly rather than following an unsolicited link.”
The FCA has also launched a review of the Child Trust Fund market, examining whether providers are failing to contact young adults when accounts mature, whether customers receive fair value and whether vulnerable young people face barriers to accessing their money.
The review is expected to report in 2027.
For the hundreds of thousands of young adults affected, however, the immediate question is simpler: is there £2,000 sitting in an account they have forgotten about?
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