Millions of pounds, intended to kickstart a generation’s financial future, lie dormant and unclaimed as the first wave of Child Trust Funds reaches maturity, with experts warning that a lack of financial literacy is leaving young adults unprepared for the windfall.
According to recent figures, approximately £1.5 billion is sitting in unclaimed CTF accounts, with some 758,000 matured accounts untouched by their owners. The scale of the issue is stark: Gavin Oldham of the charity The Share Foundation, which helps reunite young people with their funds, states the unclaimed sum belonging to low-income young adults alone exceeds £1 billion, affecting more people than the Post Office scandal.
A Scheme Born of Ambition
The Child Trust Fund was a flagship Labour government policy launched in January 2005, designed to foster a savings culture and improve financial literacy. For every child born between 1 September 2002 and 2 January 2011, the state provided a starting voucher—typically £250, or £500 for children from low-income families. If parents did not open an account by the child’s first birthday, HM Revenue and Customs (HMRC) automatically opened one on their behalf.
These tax-free accounts, which could be held as cash or stocks and shares, allowed annual contributions from family and friends, with limits rising over time to the current £9,000. Management passed to the child at 16, with full access granted on their 18th birthday. The government invested approximately £3.3 billion to establish the scheme, and by April 2025, the total market value of all CTFs was estimated at £7.5 billion.
The Lost Accounts Problem
A significant barrier is simply tracing the money. Lost paperwork, changes of address, and mergers between financial providers have left many young adults in the dark. HMRC itself allocated around 449,000 of these “lost” accounts, holding £927 million, when families did not act on the initial voucher.
Moxxie, 19, from Bath, only discovered his CTF months before turning 18. “My parents didn’t have the details… It took a couple of months going in circles,” he said, noting that others might simply give up. Providers like Foresters Financial, which manages almost 400,000 CTFs, run outreach programmes. Its chief executive, Nici Audhlam-Gardiner, said at one school visit, only half the year group knew about the funds.
Oldham believes HMRC could do more, suggesting using National Insurance numbers and the PAYE system to automatically notify young adults. “There has to be a mechanism for releasing the funds when the beneficiary reaches adulthood,” he argues.
A Financial Literacy Gap
For those who do find their money, a second challenge emerges: what to do with it. The average CTF is worth around £2,000, though accounts for wealthier families can reach £5,000. For many, it is the first substantial sum they have ever controlled, and the promised boost to financial literacy has often failed to materialise.
Polly, an 18-year-old art student from South Gloucestershire, received nearly £1,000. “I didn’t know what to do next,” she admitted. “I just withdrew it. I feel more comfortable knowing it is in the bank because I understand what that means.” George, 18, from Bristol, similarly moved his “few hundred pounds” into a savings account, confessing that “dealing with money is quite foreign… If I was more clued up, I might have invested it.”
Gina Miller from the investment platform MoneyShe warns that leaving money in a standard bank account means it loses value against inflation. “It’s like having a slow puncture,” she says. She encourages even small investments, highlighting the “magic of compounding” for young people who have time on their side.
This advice gap is critical. Jack from Buckinghamshire, who faced a £33,000 maturity, felt overwhelmed until his mother’s friend, a financial adviser, stepped in. “I couldn’t have made those decisions without help,” he said. Foresters offers an interactive dashboard and a button to book free financial advice, but such resources are not universal.
Legacy and Future
The CTF scheme was closed to new entrants in 2011 and replaced by Junior ISAs, which are generally considered more flexible with lower fees. A key difference is that a Junior ISA automatically converts into an adult ISA at 18, allowing continued saving, whereas a CTF simply matures.
Despite criticisms that the scheme did little to reduce wealth inequality, there are calls for its return with improvements. Oldham has proposed a new version targeted at low-income backgrounds with embedded financial education. Polly, the art student, agrees: “I definitely think the CTF should be reintroduced, with a practical skills programme.”
For now, the options at maturity remain: leave the money where it is, make a partial withdrawal, transfer it into an adult ISA, or, for those planning a first home, consider a Lifetime ISA to gain a 25% government bonus. Yet for hundreds of thousands, the first and most pressing step remains the simple act of discovery, claiming what is already rightfully theirs.
