Billions worth of child trust funds unclaimed: 'I found £955'

BBC Latonya Skye-Patterson, 20-year-old woman with long, blonde hair sitting in a café looking into the camera — LaTonya found out about the scheme when one of her college teachers told her

Latonya Skye-Patterson didn’t know a child trust fund had been set up for her until her college teacher suggested she check online.

“I found I had £955, which is a lot. More than I expected… it’s helped me a lot,” she said.

New figures reveal that 728,000 people are set to claim £1.4bn now that they’ve turned 18 – but many don’t know how, according to a charity that tracks lost money. Accounts exist.

Now a senior MP is backing calls for payments to be made automatically to some of these accounts – a scheme the Government says would be complex and expensive.

LaTonya, 20, is one of 6.3 million people born between September 2002 and January 2011 who have had a child trust fund started by the government, usually paying £250.

The idea was that the value of the long-term tax-free savings pot would increase by their 18th birthday.

The average amount in a child trust fund is estimated to be around £2,000, due to growth over the years and additional money put in by family and friends.

But like hundreds of thousands of others, when Latonya turned 18 she had no idea her fund existed.

share foundationA charity that helps people locate lost and unclaimed funds is calling for automatic payments for some of these funds if they are not claimed by the time account holders turn 21 yes.

“Honestly, I think it’s a great plan,” LaTonya said. “My college tutor told me about it but my brother is a year older and went to the same college and he wasn’t told about it, so it’s the luck of the draw, who knows, who tells who.

“Especially with the cost of living, getting it automatically when you didn’t know you had it can really give people the comfort they need.”

Latonya, pictured with her grandparents shortly after her birth, says her family lost track of her child trust fund because her father was in the military, so they moved around a lot when she was young.

LaTonya as a newborn baby being held by her two grandparents lying on a couch — Latonya, pictured with her grandparents shortly after her birth, says her family lost track of her child trust fund because her father was in the military, so they moved around a lot when she was young.

This “Default Withdrawal at 21” scheme covers accounts where no action was taken by parents or carers to set up a trust fund after the initial voucher was sent from the Government.

These “lost” funds are called “HMRC Allocated Accounts” and number £927m in 449,000 accounts.

Campaigners are demanding that account holders using National Insurance numbers should be automatically paid if people do not make a claim by the time they are 21.

National Insurance numbers can be used to trace account holders through PAYE payment slips, student loans or benefits.

‘treasure trove’

Sir Geoffrey Clifton-Brown is an MP who is also the Chairman of the Public Accounts Committee of Parliament.

Speaking in his role as an MP he told Radio 4’s Money Box that he supports the automatic payments idea.

He said, “I compare this money to treasure buried in vast acres of sand on a (desert) island hoping that the poor recipients of these child trust funds will go there and find this money.”

“I think we can do a lot more to encourage the government to find recipients.”

Sir Geoffrey said he would put pressure on the Treasury and HMRC the next time he appears before the Public Accounts Committee on the issue.

MP Sir Geoffrey Clifton-Brown, who also chairs Parliament’s Public Accounts Committee, believes the government “could do more” to deliver unclaimed child trust funds to their account holders.

UK Parliament An official photograph of Sir Geoffrey Clifton-Brown, MP — MP Sir Geoffrey Clifton-Brown, who also chairs Parliament’s Public Accounts Committee, believes the government “could do more” to deliver unclaimed child trust funds to their account holders.

HMRC said it was grateful for the Share Foundation’s suggestion of a “default withdrawal at 21” scheme, but said the proposal was complex and could not be easily implemented.

A spokesperson said, “HMRC will require careful legal consideration to close these accounts, obtain the savings in those accounts and transfer them, with or without the owner’s consent.”

He said the move would also require “operational systems and resources” across government departments and child trust fund providers to monitor transactions.

“The Government is committed to reconnecting all young adults with their CTF and recognizes the importance of ensuring that young adults can benefit from these funds as they reach adulthood.”