HMRC issues ‘cash in’ alert as people may unknowingly have thousands in account

People born between September 1, 2002 and January 2, 2011 may have thousands saved up in a little-known HMRC account. The Child Trust Fund was created as a long-term tax-free savings vehicle for children born during this time.

Parents could add up to £9,000 a year to their child’s account and the average cash pot currently holds around £2,200. However, many of these pots are still waiting to be claimed.

HMRC issued an alert on X, formerly known as Twitter, to urge people to claim their funds. The department wrote: “If you were born between 1st September 2002 and 2nd January 2011, you are likely to have a Child Trust Fund worth an average of £2,200.

“Already turned 18? It’s yours to cash in. Find out more on GOV.UK.” Tracking down these pots, if one was taken out in your name when you were a child, is a simple process.

Ideally, you, a parent or guardian will know who the account is with but if not the HMRC can reveal where it was originally opened. However, in order to do this you must be a parent or guardian of a child under 18 who has a Child Trust Fund or the person who the account was opened for and at least 16 years old.

You’ll need to provide the National Insurance number, full name, address, date of birth and any previous names of the child the account was opened for. Once you have provided all of this to HMRC you should receive a letter from the department within three weeks containing the details of the Child Trust Fund provider.

However, if it’s for a child who was adopted or you were given parental responsibility for them by a court, you may need to supply HMRC with further information. This will be set out in a letter after your request to track down the account.

The money can only be claimed once the child the savings account is assigned to turns 18. They can take control of it from the age of 16 though, but not remove their funds for another two years.

Any interest earned on the account is not liable for income tax, much like an ISA, but once the account holder turns 18 no more money can be added in. The Daily Express notes that at this stage people usually opt to take the money out directly, for example in cash, or transfer it to an adult ISA to continue getting their tax-free benefits.

Once the money has left the account, the Child Trust Fund will close. However, if account holders over the age of 18 don’t remove the funds it will remain open and stagnant as no one else will have access to it.