Almost two million children could have no idea they have hundreds sitting in secret savings account set up by the government

0
13
Almost two million children could have no idea they have hundreds sitting in secret savings account set up by the government



ALMOST two million children may not realise they have hundreds of pounds sitting in a savings account set up the government.
Figures show 1.8million Child Trust Funds (CTFs) were set up by the government on behalf of children when their parents didn’t.
Figures show 1.8million CTFs were set up for kids on behalf of their parents by the governmentGetty – Contributor
In 2005, Gordon Brown introduced CTFs to help parents get a head start on preparing for their child’s future.
The policy meant that anyone born in the between September 1, 2002 and January 1, 2011 could receive a CTF voucher.
This was worth between £250 and £500, but parents and friends could build on this cash pot by adding to it.
A 17 year old could also build on it and have it invested into an adult ISA or have the funds used for university when they turned 18.
Many of the recipients will be turning 17 this year as stakeholder account provider OneFamily is urging families to track down the accounts.
Steve Ferrari, from OneFamily, told The Mirror Online: “Fortunately, the government asked providers like OneFamily to look after the money on behalf of the parents, so their children won’t have missed out on the growth in value.
“The vouchers that were invested in stocks and shares, like those managed by OneFamily, will have done particularly well.
“Other providers offered cash-based products which will also have grown in value, albeit not at the rate of stocks and shares. ”
UNTAPPED FORTUNE
It comes as children could come into a collective windfall of £4.7billion, according to new research from BMO Global Asset Management.
The investment company reckons that’s an average of £11,800 in so called “shares” or “fund” accounts and an average of £4,500 sitting in stakeholder accounts – based on the amounts saved in its own CTFs coming to maturity.
It’s also done the maths on cash accounts and estimates there’s an average of £353 in these CTF accounts.
How much cash you’ll find stashed away depends on when your child was born, whether you topped up the account yourself, and which type of account the money was saved in.
OneFamily, for example, estimates that there’s an average of £2,175 in its CTF accounts – less than in those saved with BMO.

How do I recover my kid's Child Trust Fund (CTF)?

HERE's how to recover CTFs:

Check if your child has one: Your child must have been born between September 1, 2002 and January 2, 2011.
Log-in on the HRMC website: You need to sign into the government Gateway website, or sign up for an account.
Enter your details: Fill out a form with your child’s details – you’ll need to be the parent or legal guardian of the child.
When will I hear back? HMRC will get back to you, usually within 15 days.

HMRC says 72,000 people have used its Government Gateway service to track down lost CTFs.

The Sun found last year that in total, 6.3million CTF accounts were opened – 4.4million of these by parents on behalf of kids, leaving 1.9million accounts “secret accounts”.
HMRC told us that these lost accounts are stakeholder accounts, which are mainly made up of index tracking funds that follow the fortunes of companies in the FTSE 100 or FTSE All-Shares, for example.
Under the CTF scheme, parents were issued two vouchers each worth £250; one when a child was born between September 1, 2002 and August 2, 2010, and another when they reached seven.
From August 3, 2010 until January 2, 2011, parents were issued one voucher worth £50 when children were born.
Parents on low incomes – as decided on by the Government using a complicated calculation – were entitled to double these payouts.
But from September 2018 onwards, millions of children who turn 16-years-old will be able to take control of their CTFs.
This means they can switch providers, transfer to a Junior ISA and change from a cash based product to a stocks and shares based product or vice versa.
There is one catch though – while kids over 16-years-old will be able manage their CTF – they can’t touch the money until they turn 18.

More on money

MAKE A SPLASH

Lidl is selling amazing jungle and pirate adventure inflatable paddling pools

BRICKING IT

Six-bed Doncaster house on sale for £90,000 – but there’s a good reason

COOL DOWN

Where to buy cheapest paddling pool for your garden – whatever your budget

RIDE ON!

Aldi is selling a bike trailer that also turns into a pram

SUMMER TIME

Asda is selling a gorgeous garden patio set for a bargain price

GIN-CREDIBLE

B&M is selling a new sparkly unicorn gin liqueur

Currently, you can save £4,260 a year in your CTF.
Ross Duncton, managing director and head of direct at BMO Global Asset Management, said: “Just as millions of people hear from pension providers as they approach retirement, Child Trust Fund providers will be contacting older teens directly in the next two years.
“This ongoing process is just the start of a collective windfall – we estimate the first wave collectively equates to £4.7billion between now and 2020.”
Teens could be coming into a collective £4.7billion worth of Child Trust Fund cashGetty – Contributor

//players.brightcove.net/5067014667001/default_default/index.min.js

We pay for your stories! Do you have a story for The Sun Online Money team? Email us at money@the-sun.co.uk or call 0207 78 24516. Don’t forget to join the Sun Money’s Facebook group for the latest bargains and money-saving advice.

LEAVE A REPLY

Please enter your comment!
Please enter your name here