A lesser-known fee associated with Child Trust Funds could result in individuals losing out on hundreds of pounds. The account is accessible to young people aged between 18 and 22, with the average account holding a significant £2,212.
These tax-free savings accounts were set up for every child born from 1 September 2002 to 2 January 2011, with an initial government deposit of £250. Control over the account is available from the age of 16, and funds can be accessed once individuals turn 18.
Unlike government-held funds, these savings are held with banks, building societies, or other financial institutions and remain there until withdrawn or reinvested. For those who know their provider, direct contact is recommended; otherwise, the government’s online tool can help locate the account using a National Insurance number and date of birth.
Some firms offer to track down Child Trust Funds on behalf of the account holders – but they charge for this service, with fees of up to £350 or 25% of the account’s value. However, using one of these agents can reduce the amount of money received, and the process often takes longer.
Account holders still need to provide the same information to the agent as they would if they were searching for the account themselves. According to Gavin Oldham of The Share Foundation, “If you are 18-21 years old, the government would have put money aside for you shortly after birth. This investment would have grown quite a bit and it’s in your name. T”.
“The Share Foundation has linked over 65,000 young people to their Child Trust Fund accounts. It’s easy and free to find out where your money is. Go to findCTF.sharefound.org or GOV.UK to locate it today”. However, beware of fees that can cost up to hundreds of pounds.
These savings are primarily held by banks, not the government, meaning they’re subject to bank charges and fees which can slowly erode the savings left in the account, resulting in less cash when it’s finally withdrawn. One such case is Max Prince, who told the BBC that his account was left with only £12.39 when he withdrew the cash.
The investment firm managing the account, Columbia Threadneedle, had applied a £30 annual charge which consumed most of the savings. A spokesperson for the firm stated that its funds “require customers to actively make their own investment decisions and without authorisation and communication from customers, we are unable to take action on their behalf”.
