Unlocking Child Trust Funds: Money That Belongs to Young People

Child Trust Funds (CTF) were created with an honourable and important aim: to give every young person a financial asset as they entered adulthood. 

For children born between September 2002 and January 2011, money was set aside through a combination of Government contributions, family payments, and investment growth into a tax-free savings account. 

For many young people, that could mean paying for education, learning to drive, capital to start a business, putting down a rental deposit, or having a much-needed financial cushion when taking your first steps into adult life that has never felt more expensive. 

But, despite the CTFs first maturing in 2020, hundreds of thousands of young people still don’t know this money exists. Money that could make all the difference, buried in bureaucracy and lost through outdated records. 

To be exact, HMRC have acknowledged that over 750,000 adult-owned funds remain unclaimed, with an average value of £2,242 – and this is disproportionally affecting those who could benefit most. 

Many of these accounts were opened and automatically managed by HMRC, and a 2023 investigation by the National Audit Office found that young people from lower-income families are the least likely to know they have a CTF waiting for them. At the same time, parents and carers are having to navigate an intrusive and convoluted process to obtain money belonging to their disabled child.

For adults who lack the mental capacity to manage their own funds, a single stressful route exists for parents and carers: obtaining a Court of Protection deputyship order. Over 55 pages of complex forms, medical documentation to prove you’re telling the truth, and time, energy, and money sapped out of families already balancing immense responsibilities. After taking over a year in some cases, the process is such a burden that many walk away or don’t even bother.  

If you want a clear sign of just how ineffective the system is, look to 2021. A year after the CTFs first became accessible, only 15 applications were approved.  

With the Ministry of Justice estimating that between 63,000 and 126,000 young people may not have the mental capacity to manage their CTF when it matures, this bureaucracy must be disentangled now. Not another family should have to fight through layers of red tape to access savings for their child’s future.  

While they’ve arrived years down the line, I welcome the steps the Government is now taking to improve this situation: rolling out publicity campaigns, digitising parts of the Court of Protection process, recently holding a roundtable with CTF providers, and a commitment to contact every account holder once they reach the age of 21. 

However, there is already a ready-made formula on the table that has reunited 123,000 young people with their accounts, including a constituent here in Newbury. The Share Foundation has developed a proposal to automatically reunite HMRC-allocated accounts with their holders when they turn 21, in which £350 million would go to low-income young adults. 

So, after submitting Parliamentary Questions and writing directly to Treasury Minister Rachel Blake, I have urged the Government to do more and seriously consider the Share Foundation’s proposals. CTFs were rightly created to expand opportunity for young people, and with over 1.2 million 16-24 working age adults in poverty, helping people access crucial funds that already belong to them is the fair and necessary step this government must take. 

If you were born between September 2002 and January 2011, or know someone who was, I strongly encourage you to check whether a Child Trust Fund exists: 

The Share Foundation free search tool: https://findctf.sharefound.org 

Government’s Child Trust Fund tracing service: https://www.gov.uk/child-trust-funds/find-a-child-trust-fund