Young adults in the United Kingdom are being warned against paying substantial fees—sometimes as high as £400—to locate their Child Trust Funds (CTFs), accounts established by the government for children born between September 1, 2002, and January 2, 2011. The funds were initially introduced under Chancellor Gordon Brown’s tenure as a way to provide children with a financial nest egg upon reaching adulthood. At birth, eligible children were allocated £250 (£500 for those from low-income families), with some receiving an additional £250 at age seven.
Despite the intended ease of access, many young people have yet to claim these accounts. Current data indicates that approximately 760,000 CTFs, belonging to individuals now over the age of 18, remain unclaimed, holding an average balance of around £2,000 each. This translates into a collective potential of over £1.5 billion. Meanwhile, about 3.5 million accounts remain active for children under 18.
The Financial Conduct Authority (FCA) has expressed concern that some unregulated claims management firms are charging young people significant fees—either one-time charges or recurring monthly subscriptions—to help trace these funds. The FCA emphasizes that this practice is unnecessary, as individuals can locate and access their Child Trust Funds free of charge through an online government portal. Chris Knight, representing the FCA, stated, “No one should be paying hundreds of pounds to unlock money that is already theirs.”
Young adults seeking to claim their funds can use the government’s dedicated online service, requiring only their national insurance number. Additionally, the Share Foundation, a charitable organization focused on assisting with unclaimed funds, offers a similarly free tool to help locate these accounts.
The FCA is currently reviewing the 55 companies that manage Child Trust Funds to assess whether they are adequately facilitating access for account holders and whether their fee structures are reasonable. These companies were initially selected by parents after the government issued newborn payments, offering limited account options. Approximately 17 percent of parents chose cash accounts with fixed interest, four percent selected investment accounts with stock market exposure managed by chosen funds, and the default stakeholder accounts—which constituted the majority—invested government funds in the stock market with a planned transition toward lower-risk investments as the child approached age 13.
Child Trust Funds have since been phased out and replaced by Junior Individual Savings Accounts (Junior ISAs), which require parents to set up and contribute without any government seed funding. Like the earlier CTFs, investment returns and interest on Junior ISAs are tax-free throughout the account holder’s life.