Millions of Britons could receive £2000: how to find forgotten accounts for children.

According to The Sun: HMRC warns: large sums may remain forgotten in bank accounts. Approximately £1.4 billion belongs to 671,000 young people who are eligible to access funds from children’s trust accounts.

These accounts, tax-free savings funds, were established by the government for children born between September 2002 and January 2011. However, many young people are not even aware of their existence and the possibility of accessing money.

In a post on X, HMRC stated:

“Attention parents! If your child recently turned 18, they may have a #ChildTrustFund, which is valued at an average of £2,200.”

You can check for a child trust fund at the HMRC website at gov.uk/child-trust-funds/find-a-child-trust-fund. To use the service, you must be over 16 or be a parent.

To check the information about your child, you will need their full name, address, and date of birth. If you are checking for yourself, provide your name, address, date of birth, and national insurance number.

The service will provide information about the fund provider, but will not disclose the amount in the account. After filling out the form, HMRC will send you a letter with details. If you applied online, you will receive a response within three weeks, while paper applications may take longer to process.

What are child trust funds?

Child trust funds are tax-free savings accounts created for children born between September 2002 and January 2011.

The government contributed £250 to each account or £500 for children from low-income families. The next contribution was made when the child turned seven, depending on the family's financial situation.

In 2010, contributions were reduced to £50 for wealthy families and £100 for low-income families. The program was closed in 2011 and replaced with Junior ISAs.

Many parents stopped contributing to these accounts, as a result, they were left forgotten.

The funds are held by banks and credit unions, not the government. Young people can manage their accounts from the age of 16 but can only access the money after they turn 18.

If you do not receive a response within six weeks, it is advisable to write to HMRC for clarification.

Once you know who the provider is, you can contact them to withdraw or transfer the money. You can ask to transfer funds directly to your bank account by providing the details.

If you want to invest the money, you can transfer it to an ISA for tax-free accumulation.

However, if you transfer money from a child trust fund to an adult ISA after its maturity, it will not count towards the annual ISA limit of £20,000 for individuals over 18.

For those under 18, it is generally better to transfer the funds to a Junior ISA.

Junior ISAs typically have lower fees and more investment options, as noted by AJ Bell.

The funds will be locked until the child turns 18, but you will still receive the tax advantages of an ISA.

You can transfer the entire amount from the child trust fund to a Junior ISA and add up to £9,000 more in the same tax year.

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The issue of forgotten child trust funds underscores the importance of financial awareness and responsibility. Parents should seek information about their children's financial assets, as significant sums that could be used for education or the first steps into adulthood may be at stake. In Ukraine, there is also ongoing discussion about the need to improve youth awareness of financial funds that could be useful in the future.