More than 100,000 teenagers are missing out on £1,000 each – here’s how to find out if your child is one of them.
New figures show 140,000 teenagers are missing out on a total of £209.5m.
Child trust fund (CTF) accounts are due and now accessible to people over 18, holding an average of £1,500 each.
But it is estimated that one in six young people is not even aware of their personal clutches.
According to financial firm Hargreaves Lansdown, around 139,683 teens may be missing out on a pile of free cash.
In September, that number was estimated at 171 million pounds, with 114,000 teenagers no one wiser about their CTF.
But the accounts mature when you turn 18, meaning more people are eligible to use their cash each month.
An estimated 55,000 accounts reach the age of 18 every month, meaning the number of mature accounts is growing at a dizzying rate.
What is a Children’s Trust Fund?
The tax-free savings account was created in 2005 to encourage parents to save money for their children.
Children born from September 1, 2002 to January 2, 2011 are entitled to these payments.
The government paid £250 when the child was born to start the savings habit and another £250 on their seventh birthday.
Low-income families receive two £500 bills.
The accounts earn savings interest and kids can use the cash or transfer it to an adult savings account by age 18.
But the CTF was replaced by Junior Isas in 2011 and the lackluster savings accounts became less attractive.
Junior Isas offers much more generous interest rates and more investment options.
In 2015, anyone with a CTF will be allowed to transfer their funds to Junior Isa
But access to this offer is limited, meaning many savings have been left with low interest rates — or forgotten altogether.
How can I tell if I already have one?
If you have just turned 18 or your child has, chances are there is a Children’s Trust waiting to be claimed.
If you’ve lost your paperwork or are unsure, don’t panic – you can track your account via HMRC service.
Fill out the online form to ask HMRC where the account was initially opened.
You will need a Government Portal user ID and password. If you do not have a user ID, you can create one when filling out an online form.
If you are a parent looking for your child’s trust fund, you will need:
If you are looking for your own trust fund, you will need your National Insurance number.
HMRC will mail you CTF provider details within three weeks of receiving your request.
It will also contact you for more information if you have adopted the child or the court has assigned you parental responsibility for them.
What should I do if my child is under 18?
According to Hargreaves Lansdown, convert your CTF to Child ISA (Jisa) could be a reasonable choice.
“The tax benefits are the same, the annual limit is the same, the money stays locked up until age 18,” said senior personal finance analyst Sarah Coles.
“However, JISA has some additional benefits.
“If you want to keep your money in cash, they tend to offer much more competitive rates.”
For example, the most generous Jisa we could find was with Loughborough Builders Association, pays 2.5% interest, while the best CTF account we found pays only 2%.
To make the transfer, you should select a Jisa that you want to transfer to and check if it accepts the transfer.
Then fill out an application.
If the provider accepts you, the provider will transfer your CTF cash to your new account.
If you shell out just £1.67 a day until your kids turn 18, they could benefit from £ 24,000 egg nest.
We reported on a possible father save a whopping £180,000 for their three kids using Jisas.
And if you’re thinking really long-term, you can Make your kids a millionaire by the time they turn 65 by investing in their pension fund from birth.
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https://www.thesun.co.uk/money/16985975/child-trust-fund-secret-account-how-to-find-out/ Your child may have £1,000 stashed away in a secret bank account you never knew you had