FCA urges young adults to check for unclaimed Child Trust Funds

As students return to college and university this month, the FCA is urging young adults and parents to check whether they have a forgotten Child Trust Fund waiting to be claimed – potentially worth thousands of pounds.

Figures from HMRC show that 760,000 matured Child Trust Funds, worth an average of £2,000 each, remain unclaimed. That means hundreds of thousands of young people could be missing out on money that could go towards new laptops, textbooks, rent deposits or the everyday costs of student life – or setting them up with savings for their future.

Some companies, including those advertising on social media, are offering to 'find' and claim Child Trust Funds on people's behalf – often for a hefty fee or a cut of the final payout. The FCA has seen cases where customers were charged £400 to locate the account and even seen some firms charging a monthly subscription for a one-off tracing service. But missing funds can be traced for free without losing a penny to a middleman.  

Chris Knight, director of insurance at the FCA, said:

'A Child Trust Fund can be a welcome source of extra cash at a time when many young people need it most. But you don't need to pay someone else to claim what's rightfully yours – tracing and accessing your own Child Trust Fund costs nothing, so think twice about handing over a chunk of your savings to a claims firm for a job you can do yourself.'

Myrtle Lloyd, HMRC’s chief customer officer said:  

'If you’re between 15 and 24, you could be sitting on a savings payout and not even realise it. Just search 'find my Child Trust Fund' on GOV.UK to find your savings account today.'

How to check if you have a Child Trust Fund

Anyone aged 18 or over who was born between 1 September 2002 and 2 January 2011 could have a Child Trust Fund that they can access. Checking is straightforward and free:

• If you know which provider holds your Child Trust Fund, you can contact them directly to arrange withdrawal or transfer.
• If you're not sure where your account is held, you can use HMRC's free online tracing tool[1] on GOV.UK to find out.
• You'll need to prove your identity to the provider, but there is no cost involved.

Tracing a Child Trust Fund might be offered by firms who are regulated by the FCA, for example as claims management companies. But the tracing service itself is not an activity that generally needs FCA authorisation. This means firms offering this service may not be covered by the FCA’s cap on claims management fees and customers may not be able to take complaints to the Financial Ombudsman Service.

FCA review

The FCA is also launching a review into Child Trust Funds. This will look at issues including cases where young adults cannot be contacted when they turn 18 and risk losing touch with their savings altogether. It will also look at how firms are ensuring Child Trust Fund customers receive fair value under the Consumer Duty[2], and whether there are barriers to vulnerable young adults accessing their money.

This will report next year.

Notes to editors

• Child Trust Funds were available to children born between 1 September 2002 and 2 January 2011, with the scheme now closed to new applicants. Around 6.3m accounts were opened.
• Existing accounts will continue to mature until 2029, with young adults able to access them once they reach 18.
• Young adults can trace a lost Child Trust Fund for free using HMRC's online tool at GOV.UK[1].