Tens of thousands of teens could be eligible for a savings lump sum in six months
Around 75,000 teenagers could receive a lump sum when their child trust funds mature in September, according to new research from OneFamily.
Despite the first child trust funds maturing in six months’ time, 60% of teenagers and their carers are estimated to have lost track of their savings.
The average OneFamily account is estimated to hold around £2,100, but many have significantly more.
Here, we explain what a child trust fund is and how to track down a lost child trust fund account.
What is a child trust fund?
A child trust fund is a tax-free savings account offered to children born 1 September 2002 and 1 January 2011.
The initiative was set up by the government to encourage parents and guardians to save for their children’s future.
The government made a contribution of £250 to each account and families in receipt of child tax credits received an extra £250.
Up to £4,620 can be saved into child trust accounts each year – which starts on the child’s birthday and ends the day before their next.
Anyone can deposit into a child trust fund.
From the age of 16 the child named on the account can choose to manage their child trust fund.
Once they turn 18, they can officially access their money.
How to trace a lost child trust fund
To track down a lost child trust fund, you’ll need to submit a request via GOV.UK.
You’ll need to a Government Gateway ID, which only takes a few moments to set up if you don’t already have one.
Once signed in, you’ll be asked if you’re the parent or guardian or the child the account belongs to.
It takes around 15 days to receive a response about your account.
Time to talk about finances
Discussing finances openly with children can help them understand the importance of developing a good savings habit.
Jon Lee, head of investment proposition at OneFamily says: “This September we estimate that more than 75,000 teenagers will turn 18, the majority of whom will have a child trust fund in their name.
“People will have also moved home, sometimes several times, so it’s not surprising that they could have lost track of where their trust fund was invested.
“However, we want to do our best to reunite teenagers with their missing money and the easiest way is through our online child trust fund tool.
“The upcoming milestone also provides a great opportunity for teens and parents to talk about the different options for saving, and money more generally.
“By talking openly about money, families can help to establish good saving habits that will help teenagers with their future plans as they grow older.”