Millions of young people could be sitting on thousands of pounds in forgotten accounts because they qualified for Child Trust Funds (CTFs) when they were born.
Latest figures show 1.8 million vouchers were invested by the Government on behalf of children because their parents didn't – and now, as many as 17 years later, these accounts could be worth a fortune.
In 2005, Gordon Brown introduced Child Trust Funds to help parents build a nest egg for their child's future.
The policy meant that anyone born in the UK between 1 September 2002 and 1 January 2011 would receive a CTF voucher.
This was worth between £250 and £500, with some young people benefiting from a subsequent voucher of the same amount depending on their circumstances.
Parents, friends and family could then build on this initial cash - adding from £10 a month to up to £4,368 a year.
A 17-year-old who continued to pay in £10 a month, will now have £3,610 in their account, a bonus of nearly £2,000.
The money can be accessed when the child reaches 18 and can either be reinvested into a similar adult ISA or can be used to fund more immediate expenses such as university fees.
However, figures show 1.8million parents forgot to invest these vouchers, and so the Government chose a handful of providers to do so on their behalf.
Now, with many of the first recipients of the scheme just months away from turning 17-years-old, provider OneFamily is urging families to track down their accounts.
Many parents will have forgotten these accounts existed, lost track of where they were invested or lost the details to access them.
However, now is the time to act, as in some cases, forgotten vouchers could now be worth £2,000 even if there were no additional top-ups.
To help address the issue, OneFamily has set up a dedicated page to help parents and children over 16 to find their account.
"Parents have enough to think about when a child comes along, so it’s not surprising that thinking about where to invest their voucher wasn’t top of their to-do-list. Fortunately, the government asked providers like OneFamily to look after the money on behalf of the parents, so their children won’t have missed out on the growth in value," explained Steve Ferrari, at OneFamily.
"The vouchers that were invested in stocks and shares, like those managed by OneFamily, will have done particularly well. Other providers offered cash-based products which will also have grown in value, albeit not at the rate of stocks and shares. "
With the youngest CTF beneficiaries still just eight years old, there is also still plenty of time to help them grow.
"We are urging parents to track down their child’s account and if they haven’t already consider topping them up, or if they are in cash, parents should consider moving them into stocks and shares, which are proven to outperform cash over the long-term. As a provider that looks after one in four child trust funds we have created a dedicated page to help parents find their child’s account."
The government also offers advice and links to help find lost CTFs here.
How much is my account worth?
An initial Government voucher of £500 invested in 2005, with a second voucher of £500 when the child turned seven would now be worth £1,992.
An initial Government voucher of £250 invested in 2005, with a second voucher of £250 when the child turned seven would now be worth £996.
