YOUR child could have £1,000 tucked away in a hidden kitty, says savings expert Holly Mackay.
Parents could track down their child’s Child Trust Fund (CTF) and potentially uncover thousands of pounds worth of money.
The Child Trust Funds are a government initiative for children born between September 1, 2002 and January 2, 2011.
You can’t get one now – they were replaced by ISA Juniors in November 2011.
When the CTF program was running, parents and guardians received a voucher to deposit into their child’s account.
Parents could use the voucher to create a CTF in their child’s name.
But the latest figures show that up to 100,000 teenagers are missing out on the free money.
That’s why The Sun asked Holly Mackay, savings and investment expert and founder of comparison website Boring Money, for her advice on how to track down forgotten accounts.
She’s one of the experts on our Squeeze Team panel – here to help you save money and give advice on rising bills and costs.
If you’re worried about making ends meet, struggling to pay off debt, or unsure how to best manage your money, get in touch with us by emailing [email protected]
How much could be in my child’s CTF?
The amount of money that might be in Forgotten CTFs will vary.
Parents received vouchers worth between £50 and £1,000 depending on when the child was born, as well as whether the parents were on a low income at the time.
If the parents fail to set up a CTF in their child’s name and cash in the voucher, HMRC would step in and do it on behalf of the child.
Ms Mackay said your child could be in line for a big boost if they get their missing potty back.
“If your child was born in 2002, that money has been there for almost 20 years now.
“If we assume an average return on investment of around 5% per annum, then those who received a £500 voucher would have accrued over £1,000 today. Certainly worth tracking.”
How can I find it?
Most people can complete this online form via the Gov.uk website to check if there is a CTF account in your child’s name.
You will need a Government Gateway username and password. You can create one if you don’t already have one.
Parents looking for a child’s account need their unique reference number from an annual CTF statement or their national insurance number.
If you are looking for your own trust fund, you will just need your national insurance number.
This is normally sent automatically within three months of a person’s 16th birthday, but you can find it via Gov.uk if you lost it.
Once the form has been completed, HMRC will send you the details of the CTF provider by post within three weeks.
But you can’t withdraw the money whenever you want, Ms Mackay said.
“Once you find it, if your child is still under 18, you won’t be able to withdraw the money.”
Transfer to a JISA
It’s “worth” considering moving your money into a Junior ISA, Ms Mackay said.
Junior ISA accounts are also tax-free savings accounts – and you can save up to £9,000.
Ms Mackay said there are a number of benefits to transferring your CTF to a Junior ISA.
“These are still tax-free savings accounts for kids, but they offer more choice and usually have lower fees,” she said.
“You can save in stocks and shares and choose from a wider menu of options than available in most CTFs.
“Total costs will generally be around 1.2% per year or less, depending on what you choose.”
The annual fee for a JISA is 1.5%, compared to 0.5% 5o 1% for JISAs, according to Who?.
Rates are also generally more competitive.
We found that the best rates offered on a JISA were 2.5% by Dudley BS, while the best we could find for a CTF was Skipton Building Society for 2.1%.
We reported that a father was able to save £180,000 for his three children by using Jisas.
And if you think very long term, you can make your child a millionaire at age 65 by investing in their retirement from birth.
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