Thousands of young people urged to check for missing Child Trust Funds worth £2,000

The Financial Conduct Authority (FCA) has announced a comprehensive review of child trust fund providers following concerns that millions of pounds in unclaimed savings may be lost due to inadequate efforts by financial institutions to locate beneficiaries. Over £1.5 billion in assets remains unclaimed, with approximately 760,000 accounts still awaiting retrieval. These accounts, originally established for children born between September 1, 2002, and January 2, 2011, were part of a government initiative aimed at encouraging long-term savings among young people. The FCA is scrutinizing whether banks, insurers, and fund managers are actively pursuing individuals who have lost contact with their accounts and ensuring that fees and charges are fair under the newly introduced consumer duty rules. The review follows reports that some companies charge high fees for locating lost accounts, with instances of customers being charged up to £400 to trace their funds. In response, the FCA has emphasized that tracing and accessing a Child Trust Fund should be free and straightforward. Parents and young adults are advised to use HMRC’s free online tool to check for unclaimed accounts or contact their respective fund provider directly. The regulator has also warned against fraudulent claims from third-party services posing as HMRC, urging individuals to verify communications through official channels. Approximately 6.3 million Child Trust Fund accounts were created during the scheme’s operation, which ran from 2002 to 2011. Families initially received a minimum of £250 and were encouraged to contribute additional amounts. Some parents opted to let the government select a provider, while others chose independently. As these accounts mature, they will automatically transfer to the account holder upon reaching the age of 18, with maturity dates extending until 2029. Despite this, many young people may be unaware of their entitlements, particularly those who have recently returned to education or are preparing for higher learning. The FCA’s review will examine the effectiveness of current practices in identifying beneficiaries, especially those who may be difficult to reach, such as individuals with limited mobility or those living in care settings. The regulator is also investigating whether financial institutions are adequately addressing challenges faced by vulnerable groups in accessing their savings. A subset of providers, including those with significant market share or indications of consumer harm, will be subjected to more rigorous scrutiny. The findings of the review will be shared publicly by early next year, with potential regulatory actions taken if deficiencies are identified. In addition to its regulatory role, the FCA has collaborated with HMRC to enhance outreach efforts. HMRC has begun mailing reminders to eligible individuals, urging them to check for unclaimed funds. Myrtle Lloyd, HMRC’s chief customer officer, has called attention to the possibility that young people aged 15 to 24 might be unknowingly holding substantial savings. She encourages users to visit GOV.UK and search for “find my Child Trust Fund” to locate their accounts. The agency has also issued warnings against scams involving unsolicited messages requesting personal financial information, reinforcing that HMRC will not initiate such requests. As the review progresses, the FCA aims to ensure that child trust funds continue to serve their intended purpose, providing a foundation for financial security in later life. By addressing gaps in customer engagement and safeguarding against exploitative practices, the regulator hopes to reinforce public confidence in the system and prevent further loss of unclaimed savings. The outcome of the review will likely shape future policies and guidelines for managing child trust funds, potentially leading to improved transparency and accessibility for all stakeholders.