Child Trust Funds

Updated on 7 October 2020

Savings and tax

From September 2020, the first of 6.3 million Child Trust Fund accounts can be accessed. This page gives a brief overview of what you need to know.

Image of a piggy bank and a board with the words child trust funds written on it
(c) Shutterstock / kenary820

What are Child Trust Funds?

Child Trust Funds (CTFs) are long-term tax-free savings accounts. You will have one if you:

  • were born between 1 September 2002 and 2 January 2011,
  • your parent or guardian had a live child benefit claim for you, and
  • you were living in the UK and not subject to immigration control.

It is no longer possible to open a new CTF account.

The accounts were funded by an initial £250 voucher from the government. Low-income households were eligible for an additional £250 payment.

Further payments could be made into the account up to an annual subscription limit. For a short period (from September 2009 to August 2010), the government also made a further contribution upon the child’s seventh birthday.

The funds in the accounts could be held in cash or in shares and are exempt from income tax and capital gains tax. The CTF does not affect any claim to benefits or tax credits by the parent or guardian.

The funds in the CTF are held in trust for you until you turn 18. As the first CTF accounts were opened on 1 September 2002, from 1 September 2020 these accounts have now started to mature – this just means that they are no longer locked away and you can access the funds.

HMRC estimate that around 55,000 accounts will mature each month until January 2029.

What happens when I turn 18?

When you turn 18, the CTF ‘matures’ which means you can take funds out of the account.

Until you inform the CTF provider what you would like to do with the funds, the provider will transfer it into a ‘protected account’. This will still be free from income tax and capital gains tax.

I’m not sure if I have a Child Trust Fund. How can I check?

You should have a Child Trust Fund if the criteria above were met.

If your parents/guardian did not open an account with the voucher within 12 months of your birth, HMRC will have opened a ‘stakeholder’ (shares-based) CTF on your behalf. Nearly a third of child trust funds were opened in this way.

You can fill in the form on GOV.UK to ask HMRC to check if you have a CTF and, if so, to send you the details of the account provider. You will need to use (or set up) your Government Gateway account and confirm your National Insurance number.

If you cannot or do not want to use the online form, contact HMRC by post:

Charities, Savings and International 1
HMRC
BX9 1AU

When writing, give:

  • your full name and address,
  • your date of birth, and
  • your National Insurance number or, if you know it, your CTF Unique Reference Number (this can be found on the annual CTF statement). Note – you must give at least one of these pieces of information.

I am a parent/guardian. Can I find details of my child’s trust fund?

You can fill in a form on GOV.UK to locate where a CTF is held if you do not know the provider of your child’s CTF. To do so requires a Government Gateway account. You will need either the child’s Unique Reference Number or their National Insurance number. HMRC may contact you for more information if you’ve adopted the child or a court has given you parental responsibility for them.

Alternatively, you can contact HMRC by post using the following address:

Charities, Savings and International 1
HMRC
BX9 1AU

When writing, give:

  • your full name and address,
  • the full name and address of the child
  • the child’s date of birth, and
  • their National Insurance number or, if you know it, the CTF Unique Reference Number (this can be found on the annual CTF statement). Note – you must give at least one of these pieces of information.

I am a parent/guardian. Can I access the funds in my child’s trust fund on their behalf?

Although you can obtain details of where a CTF is held, once your child turns 18 the funds in the account belongs to them, not you. They are free to choose what to do with it.

If your child lacks capacity and is not able to make financial decisions for themselves then you may need a power of attorney to access the funds on their behalf. If you do not have that (or cannot obtain it – because a person must have capacity in order to give you a power of attorney, see GOV.UK), then we understand that an order from the Court of Protection (or in Scotland an intervention order or guardianship via the sheriff courts) may be required. You should seek legal advice if you are in this situation.

What can I do with the funds in the account?

Once you turn 18, the funds in the account belongs to you and you are free to choose what to do with it. For example, you could:

  • withdraw it as cash,
  • leave it in the account until a later date,
  • transfer all or part of the money into an ‘adult’ ISA account.

The above are just options – we cannot give financial advice. You must think carefully about what to do with your savings. You might want to take the chance to read up about money issues and savings, for example using free guidance such as the government’s Money Advice Service website.

If you choose to leave part of or all of the funds in the existing account (the default ‘protected account’) this will continue to be tax-exempt.

If you choose to transfer part of or all of the funds into an ISA account, you can do this without reducing your available annual ISA subscription limit. For more information about ISAs, see our guidance on Savings and tax.

Where can I find more information?

You can find more information on Child Trust Funds published by the Money Advice Service.

HMRC have also published a leaflet aimed at those with maturing accounts: 10 things you need to know about Child Trust Funds (CTFs).

See also GOV.UK.

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