£1.4bn in child trust funds lying unclaimed

More than a billion pounds worth of child trust funds (CTFs) are still lying unclaimed, the Share Foundation has said.

CTFs are long-term tax-free savings accounts for children born between 1 September 2002 and 2 January 2011.

The idea was that these pots of money would increase in value over subsequent years, and could then be claimed once the child turned 18.

But figures from The Share Foundation show that £1.4bn belonging to 728,000 people has not been claimed, partly because many don’t know these accounts even exist.

Charity calls for automatic payouts

The Share Foundation has suggested unclaimed money be paid out automatically to account holders if it hasn’t been claimed by the time they turn 21.

Sir Geoffrey Clifton-Brown MP, the chair of the Public Accounts Committee in parliament, has backed this idea and pledged to press HMRC and the Treasury on the issue.

Speaking to BBC Radio 4’s Money Box, he said: “I liken this money a bit to a treasure trove buried on a [desert] island in vast acres of sand expecting the poor recipients on these child trust funds to go and find this money.

"I think there's a lot more we could do to encourage the government to find the recipients."

Proposal too complex, says HMRC

HMRC has thanked The Share Foundation for its suggestion, but said it would be hard to implement, for operational and legal reasons.

However, a spokesperson insisted that the government is “committed to reuniting all young adults with their CTFs and recognises the importance of ensuring that young adults can benefit from these funds as they reach adulthood”.