Thousands born in four-year period missing £2,212 from their bank account

Thousands of people could be missing out on £2,212 going unclaimed in lost bank accounts. The new Labour Party government is urging 18 to 22-year-olds to come forward and claim an account with an average £2,212 waiting for them.

£1.4bn is sitting in Child Trust Funds that have matured but haven’t been accessed. “Many parents and children aren’t aware they even have the account, or don’t know who the money is with or how to track it down,” said Charlene Young, pensions and savings expert at AJ Bell.

A total of £10 billion is held in CTFs, with £1.4 billion languishing in unclaimed accounts belonging to 18-22 year olds. At age 18, savers are allowed to withdraw the money that has been squirrelled away for them. According to HMRC, 671,000 young people have yet to claim their cash.

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Ms Young adds: “The government's plea urging young people to come forward and claim their share of £1.4 billion stashed in matured CTFs highlights the magnitude of the problem of ‘continuing CTFs’ – where a child has turned 18 but their funds go unclaimed. Over half of the money in these accounts – £776 million – matured over a year ago."

Anyone who has a CTF can transfer their funds to a more modern junior ISA (JISA). "As highlighted by a Public Accounts Committee report published last year, many CTF providers are charging huge sums for managing the accounts, eating into the money. The report indicates many accounts are charging 1.5% annually for a portfolio of passive funds, whereas a JISA on a modern platform might cost around 0.25%, plus the cost of a tracker, which can be as little as a few basis points," notes Young.

Angela MacDonald, HMRC’s second permanent secretary and deputy chief executive, comments: "Thousands of child trust fund accounts are sitting unclaimed – we want to reunite young people with their money and we’re making the process as simple as possible."