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Friday, Oct 17, 2025

Hundreds of millions of pounds placed into child trust funds at risk of being forgotten, warns spending watchdog

Hundreds of millions of pounds placed into child trust funds at risk of being forgotten, warns spending watchdog

The funds provide extra financial support to people when they turn 18, but many accounts are being left untouched for a year or more - while the government is being called on to ensure people "are aware of" their money.
Hundreds of millions of pounds placed into tax-free savings accounts which people can access when they reach adulthood are at risk of being forgotten by those holding them, the National Audit Office (NAO) has warned.

The spending watchdog said estimates show that more than a quarter of child trust funds (CTFs) have remained untouched for a year or more after their owners turned 18.

A CTF is a savings account for children born between 1 September 2002 and 2 January 2011, which they can access at the age of 18.

The funds help people financially in early adulthood - but the NAO is concerned that accounts are at risk of becoming forgotten or lost track of by the account holders.

It is unclear how many children and young adults are either unaware of, or unable to locate, their CTF, the NAO said.

Gareth Davies, the head of the NAO, said: "At a time of economic hardship for millions of people across the country, it is important the government does enough to make sure young people are aware of, and can access, their child trust funds."

The government paid more than £2 billion into CTFs for 6.3 million children born during the period.

Most children received around £250 each from the government at the time their CTF was started, while those from low-income families or in local authority care received an additional £250.

Many CTFs were invested in stocks and shares, with the total market value of CTFs standing at £10.5 billion at April 2021.

Some of this belonged to young people aged 18 and over who had not unlocked their accounts.

By April 2021, around 320,000 CTFs had matured in the seven months since the first CTF account holders reached 18 in September 2020.

Of these, 175,000 (55%) had been claimed by the account holders and the accounts closed, and 145,000 remained unclaimed.

Some £394 million was, by April 2021, yet to be claimed in matured CTFs belonging to young adults who had reached the age of 18, the NAO said.

The NAO said HM Revenue and Customs intends to incorporate CTFs into a communications campaign in 2023.

The NAO estimated that CTF providers - including banks and building societies - could be earning collectively up to £100 million per year through charges on accounts.

Public Accounts Committee chair Meg Hillier said people need to be proactively reunited with their funds, adding that, in a cost of living crisis, the money could be "a vital lifeline to young people, particularly those from low-income backgrounds".
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