Martin Lewis has issued a warning to hundreds of thousands of Brits: while you may be eligible for a payout worth £2,000 from HMRC, you should steer clear of third-party firms offering to claim it for you.
The Money Saving Expert founder shared a notice about Child Trust Funds (CTF) in the most recent edition of his newsletter, claiming 671,000 young people have no idea they’re due an average £2,212 each.
It’s all because of a government-backed scheme which ran between certain years, giving children a tax-free savings or investment account with a set amount in it, which parents could then add to to build a nest egg.
The money is available to the child when they turn 18, but many have since lost the paperwork for these accounts, or forgotten about their existence.
And according to Martin, although it’s free and relatively simple to track down what you’re owed, companies are trying to charge large amounts to do it for you.
‘Don’t touch them, don’t sniff them, don’t smell them, don’t go near them,’ he said on a video posted on the MSE Youtube. ‘This is easy to do yourself.’
Want to check if you’re eligible and claim any hidden cash? Here’s what you need to know…
What are Child Trust Fund vouchers?
Child Trust Fund vouchers are part of a savings scheme which the government offered to new parents from 2002 until 2011.
The long-term tax-free accounts were started up with £250 from the Government when a child was born, with another £250 being paid when they turned seven.
Those on lower-income families were given payments of £500.
Parents were also able to top up the sum in the account to a maximum of £9,000.
All of which means the funds in the account could have grown quite a bit depending on how they were invested – with HMRC estimating the average account would be worth over £2,000.
But while over five million of these accounts were opened, they also have said a fair number have been forgotten about – with one financial firm, Hargreaves Lansdown, estimating that as many as one in six young people don’t know the account exists.
Who is eligible for a Child Trust Fund account?
If you were born between September 1, 2002, and January 2, 2011, you were eligible for a Child Trust Fund account.
You can take control of the account yourself once you’re 16, but account holders cannot withdraw the money until they turn 18.
The account is tax-free and will not affect any benefits or tax credits you may receive.
If you think you may have a Child Trust Fund account but are uncertain of the details, you can contact the account provider directly. If you don’t know who they are, you can either ask your parents or contact HMRC for details of when the account was opened.
You can ask HMRC to find a Child Trust Fund if you’re:
- a parent or guardian of a child under 18
- 16 or over and looking for your own trust fund
It’s simple to do this: either do this online or by requesting the details by post – for more information visit the Child Trust Fund section of the Government’s website.
All you need to do is provide your National Insurance number and date of birth to get started, and once you’ve submitted to form, you should get a response from HMRC within three weeks.
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It’s especially important to note though, this is a free tool, and there’s no need to pay to find out where your money has gone. Don’t be taken in by companies offering to do this for you, as they could take a large chunk of what you get back.
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