October 12th 2024.
Great news for young adults between the ages of 13 and 22! According to financial expert Martin Lewis, there may be a pleasant surprise waiting for you - potentially thousands of pounds in a Child Trust Fund that you didn't even know existed. In fact, around 670,000 individuals in this age range have untouched Child Trust Funds, with an average balance of £2,212.
For those who may not be familiar, Child Trust Funds are savings accounts that were created for children born between September 1, 2002 and January 2, 2011. They are designed to be tax-free, making them a great way to save money for the future. However, many young people are unaware of their Child Trust Funds and how to access them.
In a recent social media video, Martin Lewis issued an important warning to all individuals aged 22 and under. He emphasized that there is a possibility of having £2,000 in a Child Trust Fund that you are not aware of, and the best part is that you can withdraw this money for free.
However, Martin also cautioned against trusting companies that offer to access these funds for a fee. He stated that he has seen advertisements and videos on social media from such companies, trying to take a cut of your savings in order to give you access to your own money. In his words, "don't touch them, don't sniff them, don't smell them, don't go near them."
According to Martin, claiming your Child Trust Fund is a simple process that can be done without any outside help. The government has provided an online tool on Gov.UK to help individuals find out which bank holds their Child Trust Fund account. This way, you can easily locate your account and take control of it.
It's important to note that under the Child Trust Fund scheme, the government initially deposited £250 into each account. Parents could then contribute up to £9,000 per year into the accounts without being taxed on the funds. Although the scheme closed in 2011, many of these accounts remain unclaimed.
For those who are now 16 years old, you can take control of your Child Trust Fund and withdraw the money once you turn 18. As Martin explained, "your parents could put money in it but everyone was also given a sum by the State to start it off - normally £250 but in some cases £500. You can take the money out of your Child Trust Fund, although in some cases, if you were active with it, you can convert it into what's called a Junior Isa too."
In summary, if you are between the ages of 13 and 22, it's worth checking to see if you have a Child Trust Fund and potentially thousands of pounds waiting for you. And remember, you can easily access this money without having to pay any unnecessary fees to third-party companies.
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