Thousands of people could be missing out on £2,212 going unclaimed in lost bank accounts – how to check if you’re one

The government is urging 18 to 22-year-olds to come forward and claim an account with an average £2,212 waiting for them.

Right now, £1.4bn is sitting in Child Trust Funds that have matured but haven’t been accessed – forgotten cash that could make a huge difference to your finances. 

“Many parents and children aren’t aware they even have the account, or don’t know who the money is with or how to track it down,” said Charlene Young, pensions and savings expert at AJ Bell.

If you were born between 1 September 2002 and 2 January 2011 and your parents received Child Benefit, chances are you have a Child Trust Fund Account (CTF) waiting for you. 

CTFs were launched in 2005 to encourage parents to save for their kids’ future.

Most parents or guardians got a £250 voucher from the government to set up an account a CTF, or £500 if the family had a low income.

For those born after August 2010, your voucher may only have been £50.

Parents or guardians could add money over the years, enjoying tax-free growth. Even if they didn’t do anything with the voucher, the taxman may have opened an account on your behalf.

The cash has been growing all this time, and now, as those kids turn 18, they have a right to claim that CTF cash – averaging over £2,200 each.

The problem is, around a million people have no idea they have a CTF waiting for them.

“More than a quarter of CTF accounts were set up by the government because parents failed to do so within the 12-month window,” Ms Young said.

“This highlights why so many are unclaimed- as the parents either weren’t aware or won’t remember that an account was even set up for their child, let alone where the money is now.”  

Last year, the government estimated that’s a whopping 42% of 18–20-year-olds haven’t claimed theirs.

How track down your CTF

Tracking down your Child Trust Fund is easy. The government has an online tool that will tell you which provider holds your account. Just go to www.gov.uk/child-trust-fund/find-a-chid-trust-fund. 

If you’re 16 or over, you can look for your own CTF. Otherwise, a parent or guardian can track it down for you. All you need is your full name, address and date of birth.

Once you know which bank or investment firm holds your CTF, contact them for your account details.

Finding your own CTF is simple, so don’t be tempted by companies offering to do it for you.

Many will take up to 25% of your cash for just a few minutes’ work you could easily do yourself.

What to do with the money once you have it

After you’ve tracked down your account, think carefully about what you are going to do with your money.

If you’re lucky, you’ve just got a four-figure sum, and how you use it could help shape your future.

One option is to move the money into a Lifetime ISA. These tax-free accounts can be used to save for your first home or retirement, with the government throwing in a 25% bonus on anything you deposit.

So, the average CTF balance of £2,200 would jump to £2,750 if placed into a Lifetime ISA.

“If you then invested it to age 30, and it grew at 5% a year, even if you put nothing else in, it could be worth £5,005,” said Sarah Coles, head of personal finance at Hargreaves Lansdown.

If you added the full £4,000 Lifetime ISA allowance each year as well, by the time you were 30 you could have £75,000 towards your first home.

Another option is to boost your retirement by putting your CTF money straight into a pension.

“If you put £2,200 into a pension at 18 (and got basic rate tax relief on it) and it grow at 5% to the age of 70, it might be worth £35,353,” Ms Coles explained.

Or, use it to cut the cost of university.

Borrowing £2,200 on a student loan and leaving it unpaid for 39 years, with long-running RPI at 5.3%, compounding daily, would add up to £15,180 in interest alone, according to Ms Coles’ figures. 

So, putting that £2,200 toward your student loan now could save you over £15,000 in interest in the long run.

“At this age £2,200 can make an enormous different,” Ms Coles said.

“Many people are at the stage in life when they are earning less – or nothing at all – and yet are still wrestling with horrible outgoings.

“It can transform everyday life, possibly by providing a rental deposit so you can afford to move out or repaying debts to get you back on track.

“It can help fund your studies, or it can be saved or invested for life’s milestones, from buying a house to retirement.

“It’s why it’s so essential people are reunited with this money, to give it a chance to make the difference at a time when it counts for so much.”

Avoid large fees

Even if your child isn’t 18 yet, it is worth finding their CTF now. If you don’t, you could find they have less cash when it matures due to the massive fees your CTF provider may be charging.

A report last year from the Public Accounts Committee found that many CTF providers charge huge management fees, with some taking 1.5% a year or charging high fixed fees. In contrast, many Junior ISAs charge just 0.25% in fees. 

“If you have a Child Trust Fund worth £1,000 a £25 fee is equivalent to 5% a year, likely eating up most or all of your investment gains,” said Laura Suter, director of personal finance at AJ Bell.

“On smaller accounts the charges could even be worth more than the investment growth.

“One recently reported case saw an unfortunate saver left with just £12.39 in their account after charges.

“That’s about enough to drown your sorrows in a pint and pick up a kebab on the way home – you’ll need to walk though as there isn’t enough to cover the taxi too.”

Find your CTF and move it into a Junior ISA to cut fees and protect your cash.