HMRC says people born between 2002 and 2011 may have £2,200 in account

Brits born in certain years could be owed more than £2,000 - or maybe even far more

Young adults could be in for a tidy windfall thanks to a little-known childhood savings scheme, the HMRC has highlighted. Those born between 1 September 2002 and 2 January 2011 may have thousands stashed away in a Child Trust Fund.

The scheme was a long-term tax-free saving account created especially for them before ending in 2011. Each year, parents had the opportunity to contribute a maximum of £9,000 to their child's pot, with the average value now sitting around a cool £2,200.

But many of these accounts have yet to be claimed, prompting HMRC to send out an alert on X, formerly Twitter, calling for potential owners to claim what's rightfully theirs, according to the Daily Express. HMRC's message said: "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."

Discovering whether there's a pot with your name on it is relatively straightforward, provided you, a parent, or a guardian know which institution houses the account. If that detail is lost in time, HMRC can assist in tracking where the fund was initially opened, although this service is available solely to parents, guardians, or the named individual only if they are 16 years or older.

To track down a Child Trust Fund, you'll need to provide the National Insurance number, full name, address, date of birth and any previous names of the child for whom the account was opened. After supplying this information to HMRC, you should receive a letter within three weeks detailing the Child Trust Fund provider.

However, if the child was adopted or you were granted parental responsibility by a court, additional information may be required by HMRC. This will be outlined in a follow-up letter.

The funds can only be accessed by the child it was opened for once they turn 18, although they can take control of the account from age 16, but cannot withdraw the funds. Any interest earned on the account is tax-free, similar to an ISA.

However, no further deposits can be made once the child turns 18. At this point, many choose to withdraw the money or transfer it to an adult ISA to continue enjoying tax-free benefits.

Once the money is withdrawn, the Child Trust Fund closes. If the funds are not removed after the child turns 18, the account remains open but stagnant until the account owner reclaims it.

What is a Child Trust Fund?

The scheme was created by Gordon Brown when he was Chancellor. He said as he launched it in 2005: "The CTF is designed to ensure that every child in our country has assets and wealth and that no child is left out and all children in Britain have a stake in the wealth of the nation."

According to GOV.UK, a Child Trust Fund is a "long-term tax-free savings account for children born between 1 September 2002 and 2 January 2011.

You can find a Child Trust Fund as a parent or if you are over 16, officials say. The Child Trust Fund scheme ended in 2011. You can apply for a Junior ISA instead, the website says.

The website also states: "You can continue to add up to £9,000 a year to an existing Child Trust Fund account. The money belongs to the child and they can only take it out when they’re 18.

"They can take control of the account when they’re 16. There’s no tax to pay on the Child Trust Fund income or any profit it makes. It will not affect any benefits or tax credits you receive."