Millions of teenagers are sitting on a £2,000 windfall

Millions of teenagers are sitting on a £2,000 windfall, but most have no idea it is there or how to get it.
More than six million children who were born between 2002 and 2011 were beneficiaries of a Labour government scheme to provide them with a nest egg when they reached 18. They were given £250 at birth that was invested on their behalf in a child trust fund.
The idea was that parents and other family members could add to the fund, which would be invested in stock and shares, to provide them with a lump sum. Children from poor families or those in care were given £500.

A report by the National Audit Office (NAO) says that the value of the funds has risen dramatically, to an average of £1,911. It says that many of the beneficiaries, who are now aged over 18, are unaware that they have access to the money or know how to get hold of it.
It found that of the £800 million that is now owing to the first cohort, £394 million was owing to 145,000 people.

A YouGov survey of parents of children aged eight to 16 also found that one in six was unaware of the scheme.
The NAO said that part of the problem was that HM Revenue & Customs set up 1.7 million funds — 28 per cent of all accounts — after parents failed to do so within the required 12 months using vouchers sent to them by the taxman.
Gareth Davies, head of the NAO, said the government needed to take a much more proactive approach and advertise the existence of the funds. He also said that providers, such as banks and building societies, could be earning up to £100 million a year through charges.
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,” he said. “HMRC should also seek to re-evaluate child trust funds to understand the impact the scheme has had on savings for young people, including those from low-income families.”

Dame Meg Hillier, chairwoman of the Commons public accounts committee, added that such funds could be a lifeline for young people. “HMRC have left £2 billion of taxpayers’ money sitting in child trust funds for years while the organisations looking after the funds earned millions from them,” she said. “Yet HMRC does not know how many young people have lost track of their money. Its latest figures show almost £400 million had yet to be claimed, which in a cost of living crisis could be a vital lifeline to young people, particularly those from low-income backgrounds.
HMRC needs to proactively help reunite young people with their funds.”
If teenagers or their parents and guardians know who their child trust fund provider is they can contact them directly. Alternatively, they can visit the government website and complete an online form to find out where it is held.
An HMRC spokesman said: “We want to help people access the savings and money they’re entitled to and we encourage people to check to see if they have money waiting for them.

We regularly remind people of child trust funds and how they can check if they have an unclaimed account. We are exploring further ways we can raise awareness of the scheme.