Growing pressure is building on the UK government to automatically release unclaimed Child Trust Funds (CTFs) when account holders turn 21, as billions of pounds remain untouched by young adults.
Child Trust Funds, introduced in 2005, were designed to encourage long-term savings for children born between 1 September 2002 and 2 January 2011. However, hundreds of thousands of young people remain unaware they are entitled to these funds.
According to estimates, around 758,000 people aged 18 to 23 in the UK have yet to claim their CTFs, with approximately £1.5 billion sitting unclaimed. Experts argue that automatically releasing the money at age 21 could inject hundreds of millions of pounds directly into the hands of young adults, particularly those from lower-income backgrounds.
The issue has been highlighted by cases like that of Elle Middlemas, a student from Whitby, who struggled to determine whether she had a CTF after turning 18. With limited guidance and no clear information, she initially assumed she had no savings. It was only months later, through external advice, that she discovered and accessed her account, which contained £700.
CTFs were initially funded with £250 from the government, with an additional £250 for children from disadvantaged families or those in care. If parents did not open an account, HM Revenue and Customs created one on their behalf, investing the funds. Today, the average account is worth around £2,200.
Despite the scheme’s intentions, critics say poor communication, limited financial education, and policy neglect have left many accounts dormant. The Share Foundation, which helps reconnect young people with their savings, has already traced more than 100,000 accounts but warns that a significant number remain unclaimed.
The charity is now urging the government to introduce automatic payouts at age 21, which could release up to £500 million, including £350 million to young people from low-income households. It has also suggested distributing funds through existing systems such as payroll, benefits, or student finance channels.
Support for reform is growing among policymakers. Laura Kyrke-Smith said the scheme was based on a strong principle but had become too difficult to navigate, leaving many young people unaware of money owed to them. She called for a more transparent system, including proactive tracing of account holders.
A spokesperson for HM Revenue and Customs said efforts are ongoing to raise awareness, including direct communication with eligible individuals, social media campaigns, and an online tracing tool. Financial institutions managing the funds are also responsible for contacting account holders.
With millions of pounds still unclaimed, campaigners argue that urgent reform is needed to ensure young people receive the financial support intended to help them build their futures.