A Growing Issue for Millions of Young Adults
HMRC’s latest data reveals that the total value of unclaimed Child Trust Funds (CTFs) has climbed to more than £1.5 billion. With hundreds of thousands of accounts now matured — but untouched — the scale of the problem continues to rise.
A Short-Lived Government Initiative
The Rise and Fall of the Child Trust Fund
Child Trust Funds were introduced in January 2005 by the Labour government, aiming to give every child a financial head start.
However, the scheme lasted just six years, ending in 2011 after the Conservative–Lib Dem coalition withdrew government funding.
Although financial cost was the main driver behind their closure, the CTF system also failed to gain widespread uptake. Notably:
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Over 25% of all CTFs were opened by HMRC using a default process, because parents or guardians did not take action when vouchers were issued.
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This early inactivity foreshadowed future issues when accounts matured at age 18.
How the Scheme Worked
Government Contributions and Annual Allowances
The government allocated £2 billion across 6.3 million eligible children born between
1 September 2002 and 2 January 2011.
Key features included:
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Initial government payment of about £250
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A second government payment of £250 at age seven (before 3 January 2011)
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Optional top-ups from parents or others, initially capped at £1,200 per year (now up to £9,000 per year)
In reality, most CTFs contain only the original government contributions, as many families did not add additional savings.
The vouchers sent to parents were often forgotten or misplaced, leading HMRC to open default accounts for a significant portion of children.
The Scale of the Problem Today
Hundreds of Thousands of Matured Accounts Still Unclaimed
According to HMRC’s latest report (as of 5 April 2025):
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758,000 matured CTFs remain unclaimed or untransferred
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Over 60% of these accounts have been matured for more than a year
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The average unclaimed value is around £2,000
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Approximately 27,000 accounts hold £10,000 or more
These figures suggest that many young adults may be unaware they hold money that could make a meaningful difference at the start of their adult lives.
How to Trace a Lost Child Trust Fund
Your First Step: The HMRC Locator Tool
To find a missing CTF, the HMRC Child Trust Fund locator tool can identify the provider managing the account.
However, it cannot confirm the account’s value — this information must be obtained directly from the provider once identified.
What Happens After a CTF Matures?
Tax Benefits and Investment Options
When a CTF matures at age 18:
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It retains the same tax-free status as an ISA
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Funds can remain invested, withdrawn, or transferred
For those wishing to continue investing, transferring to a modern ISA may offer advantages, such as:
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Greater investment choice
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Potentially lower charges
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Access to more flexible products and tools
Important Investment Considerations
Investing in shares should be viewed as a long-term commitment, aligned with your financial situation and risk appetite.
Remember:
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Investment values and income can fall as well as rise
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You may not get back the amount originally invested
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Investors pay no personal tax on ISA income or gains, though some unrecoverable tax may still apply
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Stocks & Shares ISAs invest in assets that fluctuate in value
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Tax rules depend on your individual circumstances and may change
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The Financial Conduct Authority does not regulate tax advice
Speak to Chartwell Wealth Management
If you or someone in your family may have an unclaimed CTF — or if you’re considering transferring a matured account for better long-term growth — we’re here to help.
Chartwell Wealth Management can guide you through locating, reviewing and optimising Child Trust Funds or ISAs to support your financial goals.
Get in touch today for personalised advice.
