Young adults who qualified for Child Trust Funds (CTFs) when they were born could be sitting on savings accounts that have been accruing interest for the past 17 years, and almost 2 million of them are completely unaware of the fact.
Every child, who was born in the UK between 1 September 2002 and 1 January 2011 and whose family was eligible for child benefit, received a lump sum of between £250 and £500, depending on their circumstances. The Government hoped that parents, family and friends would build on the initial amount, adding from £10 a month to £4,368 a year.
According to official figures, these pots could be worth £3,610 to a 17-year-old now if £10 a month was paid in from birth.
The money can be accessed when the child reaches 18 and either be reinvested in an adult Individual Savings Account (ISA) or used to fund more immediate expenses, such as university fees.
However, official figures show that 1.9 million parents forgot to invest these vouchers at the time and so the Government chose a number of providers to do so on their behalf and one of these, OneFamily, is urging families to track down their accounts.
As a spokesman for the provider said, many parents will have forgotten that these accounts existed, lost track of where they were invested or lost the details to access them.
However, with many of the first recipients of the scheme just months away from turning 17, now is the time to find out where the forgotten vouchers are, as some could be worth £2,000, even if there were no additional top-ups.
Meanwhile, since the youngest CTF beneficiaries are only eight, if the parents track their child’s account down, they could start to top up so that the child benefits when he or she becomes an adult.
To find out more about how Kirk Newsholme Financial Planning can help, please contact Richard Leonard at Richard.Leonard@knfp.co.uk or by calling 0113 204 4215.