Unclaimed Child Trust Funds value soars
HMRC’s latest statistics show a jump in unclaimed Child Trust Funds (CTFs) to over £1,500,000,000.
HMRC’s latest statistics show a jump in unclaimed Child Trust Funds (CTFs) to over £1,500,000,000.
CTFs had only a brief existence. They were launched in January 2005 by the previous Labour government and survived for just six years, before being culled by the Conservative /LibDem coalition government in 2011, shortly after it came to power. While the main reason for their demise was financial, it was also a fact that CTFs failed to capture the public imagination. Over a quarter of CTFs were opened by HMRC under a default process after parents or guardians had failed to act.
The government paid £2 billion into accounts for 6.3 million children born between
1 September 2002 and 2 January 2011, to which parents and others could add a top-up, initially of no more than £1,200 a year. This has since risen to up to £9,000 a year. In reality, most CTFs were funded with a single government payment of around £250, with a second £250 if the child reached age seven before 3 January 2011, when the government funding ended (although CTFs continued to exist).
Those payments took the form of a voucher, sent to the child’s parent or guardian, and were frequently ignored – leading to a high proportion of HMRC-opened CTFs. With hindsight, the default rate was an omen of the potential problems that would arise when CTFs matured at age 18.
The latest report from HMRC shows that as at 5 April 2025, there were 758,000 matured CTFs not claimed or transferred, over 60% of which had matured more than a year previously. The average value of the unclaimed plans was around £2,000, but some 27,000 plans had a worth of £10,000 or more.
To trace a CTF, the first port of call is the HMRC locator tool that can supply the name of the CTF provider, but not the CTF’s value.
A matured CTF enjoys the same tax freedom as ISAs beyond age 18. However, if continued investment is the goal, it still makes sense to review the option of a transfer to a new ISA, which will probably offer a greater investment choice and potentially have lower charges.
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