A MARTIN Lewis fan has revealed how the expert’s handy tip helped her track down £2,000 in free cash.
In the latest MoneySavingExpert newsletter, a reader named Kirsty shared how she found the cash in her kids’ Child Trust Funds (CTFs).
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The mum-o-two had read one of MSE’s newsletters late last year and decided to check if her adopted children had one of the accounts.
CTFs are long-term, tax-free savings accounts and were set up for children born between September 1 2002 and January 2 2011.
Many children got around £250 each from the state at the time their CTF was started, while those from low-income families or in local authority care received an extra £250.
Funds can be withdrawn once the child turns 18.
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Kirsty wrote into MSE after she found £1,000 had built up in both of her children’s accounts.
She said: “As an adoptive family, we didn’t know anything about CTFs until I read one of your newsletters at the end of 2022.
“I followed the info and discovered that both children had funds set up valued at around £1,000 each.” Thank you so much for raising awareness.”
Kirsty then thanked Martin and his team for raising awareness of these handy accounts.
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Nearly 430,000 18 to 21-year-olds have an unclaimed CTF, worth an average of £2,000, according to the latest figures.
Below we reveal how you can track down a Child Trust Fund and what to do if you have one.
What is a Child Trust Fund and does my child have one?
Kids born between 2002 and 2011 also had the opportunity to set up a child trust fund themselves.
HMRC sent the parents or guardians of qualifying children a starting payment voucher of £250 (or £500 if you were on a low income).
If you didn’t set one up for your child within a year, HMRC would do it automatically.
Anyone can add to the account thereafter, and you can put up to £9,000 a year into it.
The year starts on the child’s birthday and ends the day before their next birthday.
Your child will have full control over the account once they turn 18.
At that point, no more money can be added either.
Until your child withdraws or transfers the money, it stays in an account that no one else has access to.
CTFS were replaced by Junior ISAs in November 2011, so you can’t get one now.
How do I find an account?
If you are one of the tens of thousands of young adults who haven’t claimed their account, the government has an online tracing service where you can find out if you have one and which provider it’s with.
To find out more, you’ll need a government gateway login and National Insurance number.
If you are a parent looking to find out about your child’s fund you can either access it online, or you’ll need to send a letter to HMRC with the following details:
- Full name and address
- Child’s full name and address
- Child’s date of birth
- Child’s National Insurance number or Unique Reference Number if known
What happens after I’ve claimed the money?
There are a few options to consider once you’ve taken the money out of a matured trust fund.
Usually people put it straight into a bank account, invest it or transfer it into an ISA.
You can ask your CTF provider to hand over the money and get it cashed into your account.
This way you’ll need to share the bank account details you wish to transfer the cash into with HMRC, and you won’t be able to do this until you’re 18.
But if you’d rather invest it, you can transfer it into an ISA (Individual Savings Account).
The interest rates on a cash ISA are typically lower than a standard savings account, but a Lifetime ISA may be better if you’re saving for your first home.
If you go for a Lifetime ISA, you’ll be able to add £4,000 a year to the account and the government will grant you a 25% bonus as long as you put it towards buying a first home.
You can also wait until retirement to access the cash.
And keep in mind you don’t pay tax on the interest you earn in these types of accounts.
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Meanwhile, Martin Lewis has once again given people a great tip on how to get back some money they might be owed.
Plus, shoppers looking for a bargain advent calendar can save hundreds of pounds by using another tip from Martin Lewis’ MoneySavingExpert.
You can also join our new Sun Money Facebook group to share stories and tips and engage with the consumer team and other group members.
