October 16th 2024.
Martin Lewis, the founder of Money Saving Expert, recently shared a warning with his readers about third-party firms offering to help claim payouts from HMRC. While it may be tempting to seek assistance, Lewis advises steering clear of these companies.
In his latest newsletter, Lewis highlighted the issue of Child Trust Funds and how 671,000 young people are unaware that they are entitled to an average of £2,212 each. This is due to a government-backed scheme that provided children with a tax-free savings or investment account, with the option for parents to add to it and build a nest egg for their child's future.
Unfortunately, many parents have either lost the paperwork for these accounts or have forgotten about them entirely. Lewis stresses that although it is relatively simple to track down these accounts and claim the money, some companies are charging exorbitant fees to do it for you.
In a video posted on MSE's Youtube channel, Lewis urges his followers to avoid these third-party firms and handle the process themselves. He emphasizes, "Don't touch them, don't sniff them, don't smell them, don't go near them. This is easy to do yourself."
So, if you're curious about your eligibility for a Child Trust Fund account and want to claim any hidden cash, here's what you need to know.
Child Trust Fund vouchers were part of a savings scheme offered by the government from 2002 to 2011. New parents would receive £250 from the government when their child was born, with an additional £250 when they turned seven. Families with lower incomes received payments of £500. Parents could also contribute their own funds to the account, with a maximum limit of £9,000.
Due to the potential for growth through investments, HMRC estimates that the average Child Trust Fund account could be worth over £2,000. However, with over five million of these accounts opened, many have been forgotten about. Financial firm Hargreaves Lansdown estimates that one in six young people are unaware of their account's existence.
If you were born between September 1, 2002, and January 2, 2011, you are eligible for a Child Trust Fund account. However, account holders cannot access the money until they turn 18. The account is tax-free and will not impact any benefits or tax credits you may receive.
If you think you may have a Child Trust Fund account but are unsure of the details, you can contact the account provider directly. If you do not know who the provider is, you can either ask your parents or contact HMRC for more information.
To locate a Child Trust Fund, you can request the details online or by post. All you need to provide is your National Insurance number and date of birth. HMRC typically responds within three weeks. It is essential to note that this is a free service, and you should not pay any companies to locate your money.
Lewis encourages readers to share their thoughts and experiences in the comments section.
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