YOUR child could have a £1,000 stashed away in a hidden pot of cash, savings expert Holly Mackay said.
Parents could track down their kid’s Child Trust Fund (CTF) and potentially uncover thousands of pounds of cash.
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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 Junior ISAs in November, 2011.
When the CTF scheme was running, parents and guardians received a voucher to deposit into their child’s account.
Parents could use the voucher to set up a CTF in their child’s name.
But latest figures show that up to 100,000 teens are missing out on the free cash.
That’s why The Sun asked savings and investment expert Holly Mackay, founder of comparison website Boring Money, for her tips on how to hunt for 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, are struggling to pay off your debts or don’t know how best to manage your cash, get in touch by emailing [email protected].
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How much could be in my child’s CTF?
The amount of cash that could be sitting in forgotten CTFs will vary.
Parents were given vouchers worth between £50 and £1,000 depending on when the child was born, as well as whether parents were on a low income at the time.
If parents didn’t set up a CTF on behalf of their child and cash in the voucher, HMRC would step in and do this on the child’s behalf.
Ms Mackay said that your child could be in line for a nice boost if they recover their missing pot.
“If your child was born in 2002, then this money has been sitting there for nearly 20 years now.
“If we assume an average investment return of about 5% a year, then those who received a voucher for £500 would have over £1,000 accumulated today. It’s certainly worth tracking down.”
How do I track it down?
Most people can fill in this online form via the Gov.uk website to check if there’s a CTF account in your child’s name.
You will need a Government Gateway user ID and password. You can create one if you don’t have one already.
Parents looking for a child’s account need their Unique Reference Number from an annual CTF statement or their National Insurance number.
If you’re looking for your own trust fund, you’ll just need your National Insurance number.
This is normally sent automatically in the three months before a person’s 16th birthday, but you can track it down via Gov.uk if you’ve lost it.
Once the form is complete, HMRC will send you details of the CTF provider by post within three weeks.
But you can’t draw out the cash whenever you want, Ms Mackay said.
“Once you have found it, if your child is still under 18 you will not be able to take the money out.”
Transferring to a JISA
It is “well worth” considering moving your money to a Junior ISA, Ms Mackay said.
Junior ISA accounts are also tax-free savings accounts – and you can save up to £9,000 in.
Ms Mackay said there are a number of benefits to rolling your CTF over to a Junior ISA.
“They are still tax-free savings accounts for children, but offer more choice and typically have lower fees,” she said.
“You can save into stocks and shares and pick from a broader menu of options than available in most CTFs.
“The total costs will typically be around 1.2% a year or less, depending on what you pick.”
Annual fees for a JISA are 1.5%, compared to 0.5% 5o 1% for JISAs, according to Which?.
Rates are usually more competitive as well.
We found that the best rates being offered on a JISA was 2.5% by Dudley BS, while the best one we could find for a CTF was Skipton Building Society for 2.1%.
We reported on one dad able to save a whopping £180,000 for their three kids using Jisas.
And if you’re thinking really long term, you can make your child a millionaire by the time they turn 65 by investing in their pension pot from birth.
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