Child Trust Funds: What You Need to Know
Between 2002 and 2011, the UK government gave every newborn child a voucher worth at least 250 pounds to open a Child Trust Fund (CTF). If your child was born in that window, they have money sitting in an account. Here is what you need to know.
What Is a Child Trust Fund?
A Child Trust Fund is a long-term savings account for children born between 1 September 2002 and 2 January 2011. The government provided an initial deposit of 250 pounds (500 pounds for lower-income families), and parents, family and friends could add up to 9,000 pounds per year tax-free.
There are three types: stakeholder accounts (invested in a mix of shares), share accounts (invested directly in shares), and savings accounts (cash, earning interest). If parents did not choose, HMRC opened a stakeholder account automatically with an approved provider.
What Happens at 18?
When the child turns 18, they gain full control of the account. The money belongs to them, not the parents. They can withdraw it, keep it invested, or transfer it into an adult ISA. There is no obligation to withdraw immediately.
If no action is taken, the account continues as a protected account but no further contributions can be made. The money keeps growing tax-free. The first wave of CTF holders turned 18 in 2020, and many had balances between 800 and 2,000 pounds depending on investment performance.
How to Find a Lost CTF
Around a third of CTF accounts were opened automatically by HMRC because parents did not respond. Many families have no idea which provider holds the money. To find it:
- Use the HMRC online tool (you need a Government Gateway account)
- HMRC will tell you the provider name
- Contact the provider directly to get account details
- You will need the child National Insurance number (issued at 16)
Over 6 million CTF accounts exist, and billions of pounds sit unclaimed. It is worth checking even if you do not remember opening one.
Transferring to a Junior ISA
Since 2015, you can transfer a CTF into a Junior ISA (JISA). This is often a good idea because JISAs typically offer better interest rates or lower investment fees. The transfer does not count towards the annual JISA allowance.
- Open a Junior ISA with your chosen provider
- Ask the JISA provider to initiate the transfer
- The CTF provider must complete it within 30 days
- You cannot hold both a CTF and JISA at the same time
Key Numbers
6.3M
Accounts opened
9,000
Annual contribution limit
0%
Tax on growth