Did you know that if you turned 18 after 1st September 2020, you could have money waiting for you in a Child Trust Fund (CTF) account? Keep on reading to find out what a CTF is, and how you can claim your money!
What is a Child Trust Fund?
Children born in the UK between 1st September 2002 and 3rd January 2011 were automatically provided with a CTF – even if parents did not set an account up. Now many of these children have turned 18, the money is theirs to claim. But due to HM Revenue and Customs (HMRC) opening CTFs on behalf of parents who didn’t, many of these account holders are unaware that they have a CTF with money in.
How much money could I claim?
The amount of money in a CTF varies between accounts. Some parents set up an account and paid money into it, others had their account opened by HMRC. Each account has at least £250 in, with the average amount in an account thought to be £2000. New figures suggest that 728,000 people are now old enough to claim their share of the £1.4bn sat in CTFs*.
How do I check if I have a CTF?
You can find your CTF from the age of 16 and take control of the account, but you cannot withdraw, or transfer, any money until you turn 18. If your parent set up an account for you, you can ask them for the provider’s name and contact the provider directly. If your parents did not set up an account for you, you can us this link to ask HMRC to find a CTF provider – however it will not tell you how much is in the account. Alternatively, there is a charity called The Share Foundation, who work to help young people find their CTF.
What can I do with the money that is in my CTF?
If you are 18 and have located your CTF, there are two options for what you can do with the money; you can either withdraw the cash or transfer it to an Adult Individual Savings Account (ISA). Both options will subsequently close the CTF. If you are 16, you can take control of the account and contribute to your CTF until you turn 18.
My child has a CTF, but they’re not 16 yet – is there anything I can do with the account?
Anyone can add money into a CTF. Up to £9000 per year can be added into the account by family and/or friends. The year starts on the child’s birthday and ends the day before their next birthday. There is no tax to pay on a CTF account. Be aware that once the child turns 18, the money is theirs to do with what they please.
The interest rates on my CTF are low – do I have any options?
Unfortunately, there is a lack of need for competitive interest rates with CTF’s, since no new accounts have been opened since 2011. This has led some CTF’s having lower interest rates than those of Junior ISA’s. If this is the case for your CTF, it is possible to transfer it to a Junior ISA – however, it is always best to compare your current CTF interest rates with the interest rates of the Junior ISA you are looking to move to, to ensure that you are getting the most for your money!
*https://www.bbc.co.uk/news/articles/cjr82gejlxno
