Campaign launched to reunite young Britons with forgotten savings accounts
HMRC is contacting 21-year-olds as part of a new awareness drive around lost child trust funds, with an average balance of £2,200
Rather than demanding money, HMRC is giving it away for once with a new campaign to reunite thousands of young Britons with forgotten savings accounts typically containing £2,200.
HM Revenue and Customs is contacting 21-year-olds as part of a new awareness drive around lost child trust funds (CTF) – the tax-free savings accounts set up for children born between September 2002 and January 2011.
The accounts were introduced by the Labour government in 2005 to encourage parents to save for their child’s future. Many children received around £250 each from the government at the time their CTF was started, while those from low-income families or in local authority care may have received an additional £250.
The idea was that parents would take control of the fund and could add up to £9,000 a year. If an account was not opened by a parent within 12 months of a child being born, HMRC opened one on their behalf. The initial government stake was invested in the stock market, and the average account balance is put at £2,200.
“Hundreds of thousands of young people in this country don’t know they have a CTF, let alone how to access it,” said Lucy Rigby, the City minister and economic secretary to the Treasury. “Some will have a couple of thousand pounds sat there that would really help them as they begin adult life.”
The savings accounts are not held by the government but in banks, building societies or other savings providers. This week Rigby met stakeholders, including representatives of HSBC and Nationwide, to identify ways to connect savers with their accounts.
Once the account holder turns 18 the CTF matures, and its owner can decide whether they want to withdraw the money or reinvest it. Today two-thirds of the more than 6 million recipients are over 18 and entitled to access their money. Despite that, more than 750,000 CTFs are unclaimed.
Young people can track down their account using the government’s free online tool. If they know where the account is held they can contact the savings firm directly. The Share Foundation charity, which is calling for HMRC-allocated accounts to be automatically released when holders turn 21, can also help with the search.
In the first instance, HMRC is writing to all 21-year-olds with unclaimed accounts. The tax authority picked this cohort because many will be in work or have accessed student finance and it should have up-to-date contact details.
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