Do you have a hidden bank account as £1.4billion goes unclaimed
OVER half a million people could be missing out on their share of £1.4billion which is being held in forgotten accounts.
New figures from The Share Foundation show how some 782,000 people could be entitled to their share of cash, which is being held up in Child Trust Funds.
These accounts are long-term, tax-free savings accounts which were set up for every child born between September 2002 and January 2 2011.
The Government deposited £250 for every child during that time period, or £500 if they came from a low income family earning around £16,000 a year or below.
An extra £250 or £500, depending on their families’ economic status, was deposited when the child turned seven.
In 2010, this was reduced to £50 for better off households and £100 for those on a lower income.
The scheme was eventually scrapped in 2011 as part of cost-cutting measures following the 2009 financial crisis and was later replaced with Junior ISAs.
Currently, parents or friends can deposit up to £9,000 into the child’s account tax-free, with the money usually invested into shares.
The youngest children across Britian to have these accounts are about 13 years old, so have around five years before they can access the cash.
It is important to note that savings in these accounts are not held by the Government but are held in banks, building societies or other saving providers.
The money stays in the account until it’s withdrawn or re-invested.
Young people can take control of their Child Trust Fund at 16, but can only withdraw funds when they turn 18 and the account matures.
Around 46% of these accounts are HMRC allocated accounts, meaning they were opened for a child by the government.
These untouched allocated accounts are said to be worth a total of £927million.
If you think you could be missing out on this share it is worth trying to track your account down.
There are a number of third party groups offering to search for Child Trust Funds but it worth noting that they will charge a fee so you might loose a chunk of your money.
The Government has a free tool you can use online to help track down your fund.
You can find this by searching for “find a Child Trust Fund” on GOV.UK.
TRACKING YOUR TRUST FUND
You’ll need to have a few personal details to hand to do the search, including your date of birth and National Insurance (NI) number.
Your NI number remains the same for your entire life. It’s made up of two letters, six numbers and a final letter.
You can find this number on your payslips or by downloading the HMRC app, which can be downloaded on the Apple or Google Play Store.
When you’re done filling this out, HMRC will then send you a letter revealing what company has your Child Trust Fund.
What to do once you have claimed the money
Usually, people put the cash straight into a bank account, invest it, or transfer it into an ISA.
You can also ask your Child Trust Fund Provider to give you the money and get it cashed into your bank account.
This way you’ll need to share the bank account details you wish to transfer the cash into with HMRC.
But if you’d rather invest it, you can transfer it into an ISA.
The Sun recently broke down whether or not an ISA is right for you, which you can read here.
LOST CASH
By Charlene Young, pensions and savings expert at AJ Bell
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.
More than a quarter of CTF accounts were set up by the government because parents failed to do so within the 12-month window.
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.
Any child born between 1 September 2002 and 2 January 2011 who hasn’t already got details of their account should track it down.
Once you’ve tracked down the money you can choose what to do with it. Your options are to transfer it to an adult ISA or withdraw the money. Until then your money will just sit in an account that no one else has access to, possibly paying very high charges.
Anything you transfer to an adult ISA at maturity will not count towards your annual ISA allowance, which is £20,000 for over 18s.
For many young people who have CTFs but are still under 18, it will make sense to transfer it to a Junior ISA, where the charges will likely be lower, and you’ll have a much bigger investment choice.
The money will still be locked up until you turn 18, but the tax-free benefits of ISA investing still apply. You can transfer the entire CTF into a Junior ISA and still add up to £9,000 to it in the same tax year.