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Executive Summary: HMRC’s New Outreach to Unclaimed Child Trust FundsHMRC has launched a nationwide awareness campaign aimed at reconnecting thousands of young Britons with forgotten Child Trust Funds (CTFs). By writing directly to 21‑year‑olds, the tax authority hopes to surface dormant savings that could provide a meaningful financial head‑start.Targeted Outreach to 21‑Year‑Olds and the Mechanics of the CampaignThe campaign focuses on individuals born between September 2002 and January 2011, the cohort eligible for CTFs introduced by the Labour government in 2005. Lucy Rigby, City Minister and Economic Secretary to the Treasury, met with representatives from HSBC and Nationwide to map out communication channels and streamline the claims process.Financial Scope: How Much Money Is Sitting Unclaimed?Average account balance: £2,200Total recipients of CTFs: > 6 millionAccounts already matured (holders over 18): roughly two‑thirds of the totalUnclaimed accounts: > 750,000Implications for Young Adults and the UK Savings LandscapeUnlocking these funds could provide a modest but significant boost to early‑career finances, helping with rent, debt repayment or further education. Banks and building societies stand to see a surge in inbound enquiries, while charities such as the Share Foundation anticipate increased demand for assistance in locating accounts.Looking Ahead: Potential Policy Shifts and Market ResponsesThe campaign may set the stage for broader reforms, including calls to automatically release CTFs at age 21. If successful, the initiative could prompt other government‑run savings schemes to adopt similar outreach models, reinforcing financial inclusion for the next generation.

For those turning 18, options include partial withdrawals, transferring to an adult Isa, or taking out a lifetime Isa. Experts encourage young adults to consider their long-term financial goals and seek guidance to make the most of their CTF windfall.

When Elle Middlemas turned 18, she began wondering whether she owned a Child Trust Fund (CTF) – a government‑backed savings account created for children born between 1 September 2002 and 2 January 2011. Her search hit a dead end; she could not confirm if she was entitled to any money and an email to HMRC yielded no response.Middlemas, a Whitby college student, explained that the loss of her mother at age 11 left her with little guidance. “My sister is 21 and spent three years looking for a fund and found nothing, so we assumed we didn’t have one,” she said, expressing the frustration felt by many of her peers.She and her sister are part of an estimated 758,000 people aged 18‑23 who have unclaimed CTFs. Collectively, these dormant accounts hold roughly £1.5 bn, a substantial sum that disproportionately belongs to low‑income families who are often unaware of its existence.Advocates are now pressing the government to automatically release CTFs when holders reach 21 years of age. Experts estimate that such a policy could inject up to £286 m directly into the pockets of young people who need it most.Middlemas finally learned of her entitlement after a conversation with a friend’s parent six months after her birthday. She discovered the Share Foundation, a charity that helps reconnect youths with their funds, and located a NatWest account bearing her name.“I had £700 sitting in my bank and thought, ‘What is going on?’ My sister also had one but never knew how to access it,” she recalled. The sisters plan to use the money to support university expenses and repay debts, underscoring the tangible impact of the scheme.The CTF programme was launched by the Labour government in 2005 to encourage parental savings. Every child received a £250 government contribution, with an additional £250 for those from low‑income families or in local authority care. Parents could add up to £9,000 per year, and any investment gains accrued until the child turned 18.If a parent failed to open an account within 12 months of birth, HMRC would create one on the child’s behalf. Today, the average value of a CTF stands at about £2,200.More than two‑thirds of the six million original recipients are now over 18 and eligible to claim their funds, with HMRC‑allocated accounts representing 28 % of all CTFs.Geographically, the North‑East of England has the highest concentration of HMRC‑allocated accounts, totalling £48 m. Across the UK, youths from the most disadvantaged 15 % of families hold accounts averaging £2,900 in value.Gavin Oldham, chief executive of the Share Foundation, warned that the scheme is hampered by poor communication, limited financial education, and “policy neglect”. He indicated the charity is considering a judicial review to compel the government to release the unclaimed assets.Oldham noted that the charity has already linked “well over 100,000 accounts to young adults”, yet the “sheer quantum of these unclaimed accounts remains a major problem”.“It is strange to find a government which expresses concern over youth poverty while doing so little to deliver on a groundbreaking scheme,” Oldham added.The charity’s proposal to release HMRC‑allocated funds automatically at 21 would free roughly £500 m, including £350 mOldham cautioned that a legal challenge, while potentially successful, could delay payouts for years, leaving vulnerable youths “denied their birthright for far too long”.Beyond immediate release, the Share Foundation is urging the creation of a new, targeted scheme for low‑income youths that embeds a financial‑awareness component, allowing participants to top up their funds through education‑linked incentives.Labour MP Laura Kyrke‑Smith echoed these concerns, describing the CTF system as “confusing and opaque” and calling for proactive tracing of account holders and clearer public information.HMRC responded that it is “directly sending every eligible young person information to help them find their child trust fund”, while also raising awareness via social media, broadcast interviews, and an online tracing tool. The agency added that banks, building societies, and investment firms managing the funds share responsibility for communicating with account holders.