Money-saving expert Martin Lewis has said that parents with children aged between 12 and 21 could get a £1,000 payment with a simple online check.
The money guru said parents could have cash stashed away in a Child Trust Fund that has been forgotten about. Child Trust Funds are long-term, tax-free savings accounts that the government set up for every child born between 1 September 2002 and 2 January 2011.
Upon opening the accounts, the government contributed an initial deposit of at least £250. Many parents regularly added to it – but there’s also plenty of youngsters who may be completely unaware they even have one.
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On a recent episode Martin Lewis Money Show, the Money Saving Expert explained the funds can be accessed once the child turns 18. He said that even if parents didn’t pay into them, the government did, meaning the average Child Trust Fund is worth around £1,000.
Martin said on the ITV show: "Any child between the 1st of September 2002, which is basically a 21-year-old, and the 2nd Jan 2011 – so a 12-year-old – will have had a Child Trust Fund and the State will have added money even if you didn't. Up to a million children have these accounts unknowingly.
"They are worth on average around £1000-ish. So if you don't know about it and you have a kid that age, go to gov.uk – Child Trust Funds – and you can locate and trace where the money is."
Martin said parents of those under 18 are able to check online, while people over the age of 16 can also check for themselves. He added: "If you don't know if you have one of those, it really is worth checking if you're in that age bracket.”
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Back in September, HM Revenue and Customs (HMRC) warned that nearly 430,000 18 to 21-year-olds have an unclaimed fund, with the average worth £2,000. A staggering 5.3 million Child Trust Fund accounts are currently open, and families can continue to pay in up to £9,000 a year tax-free into a Child Trust Fund until the account matures.
Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive, said: “Many 18-21 year olds are starting out in first jobs or apprenticeships, starting university or moving into their first home and their Child Trust Fund is a pot of money with their name on.
"I would encourage young people to use the online tool to track it down or, for parents of teenagers, to speak to them to ensure they’re aware of their Child Trust Fund. It could make a real difference to their future plans.”
You can check if you have a Child Trust Fund on the government website here.
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