Nationwide, HSBC UK and Coutts join Treasury effort to trace £1.6 billion in lost child savings

Some of Britain’s largest banks and mutuals have joined a new government taskforce charged with reuniting more than 750,000 young adults with the £1.6 billion sitting in their unclaimed Child Trust Funds.

Rachel Blake, the Economic Secretary to the Treasury, convened the taskforce, which held its first meeting on Monday (29 June).

Its members include Nationwide, HSBC UK, Coutts, OneFamily, Sheffield Mutual, Unity Mutual, the Coventry, Foresters, Pilling, Healthy Investments and Yorkshire Building Society.

The group will work to improve tracing methods, sharpen how providers reach young account holders, and agree industry commitments that move more accounts into the right hands, the government said as it announced the push.

Parents and HM Revenue and Customs opened around 6.3 million Child Trust Funds for children born between 1 September 2002 and 2 January 2011, with the state seeding each account so that every child would reach adulthood holding a financial asset.

The first accounts matured in September 2020. More than 750,000 of those matured accounts remain unclaimed, and the government puts the average balance at about £2,200.

Many of the young people now entitled to the money, aged between 15 and 23, simply do not know the accounts exist.

HMRC opened roughly a quarter of the funds on a child’s behalf after parents missed the voucher posted to them, leaving those account holders with no obvious record of the savings.

A 2023 National Audit Office investigation found that young people from lower-income families are the least likely to know they have a fund waiting.

Blake said too many young people miss out because they are unaware of where their account sits or how to reach it, and cast the taskforce as a way of making the money easier “to find and claim what’s rightfully theirs”.

John-Paul Marks, the chief executive and first permanent secretary of HMRC, urged anyone who suspects they qualify to use the free tracing service, stressing that the savings belong to the young people themselves.

The taskforce follows months of scrutiny from the Public Accounts Committee, which has pressed HMRC to do more to match young people to their accounts.

Its chairman, Sir Geoffrey Clifton-Brown, has gone further, telling the BBC’s Money Box programme that funds should pay out automatically at 18 rather than leaving young people to come forward and claim them.

Critics of the present system point to accounts eroded by fees: the BBC has reported cases cut to as little as £12 by management charges, evidence that leaving the money untouched is not cost-free.

How to trace an account

Anyone born between 1 September 2002 and 2 January 2011 can search for their account through the “Find a Child Trust Fund” tool on GOV.UK.

The search is free, needs only a National Insurance number and takes a few minutes. Account holders aged 18 or over can withdraw the money straight away, while those aged 16 and 17 can take over the running of the account but cannot yet draw on it.

Whether that onus should stay with young people, or shift to automatic payment at 18, is the question the Public Accounts Committee is still putting to the Treasury and HMRC.

Now read: Scrapping National Insurance for under-25s would cost taxpayers £132,000 for every young person it puts into work