The Child Trust Fund is issuing a warning because some Britons have £2,000 in unclaimed funds. Here’s how to get it.
Although the CHILD TRUST Cash have been mature for over a year, many people have yet to receive the funds to which they are entitled.
A Child Trust Fund (CTF) was initially introduced by the government in 2005 as a long-term tax-free savings account for children. The initiative aided children who were born between September 1, 2002, and January 2, 2011, many of whom are now teenagers or adults. According to the Association of Financial Mutuals (AFM), over 300,000 teenagers have yet to claim their monies.
This corresponds to £600 million in unclaimed funds that many Britons may benefit from.
According to AFM, almost 46% of people who are eligible have yet to claim their money, which are worth an average of more than £2,000 each.
This is an improvement over the months following the initial fund’s maturity, when unclaimed funds reached an all-time high of 80%.
However, many parents and teenagers are unclear how to file a claim and what to do with the money.
Meanwhile, the funds are invested in a cash fund or a stocks and shares account.
It will ultimately be up to the CTF account holder to determine what to do with the funds.
They have the choice of withdrawing the money, leaving it in the fund, or reinvesting it in other savings products.
Martin Shaw, CEO of the Association of Financial Mutuals, also offered advise to those wishing to keep their money invested.
For starters, he suggested that a Lifetime ISA (LISA), which is aimed for people aged 18 to 39, could be a good alternative.
The tax-free accounts can help savers receive a 25% government bonus worth up to £1,000 per year.
Individuals should be aware, however, that this form of account is only for people saving for a first home or retirement.
Finally, a stocks and shares ISA may be used to “dip a toe” into the world of investing.
These have a higher risk than cash ISAs, but they may provide a better return.
Individuals should always be mindful, though, that they may receive less than they put in.
Mr Shaw emphasized the need of shopping around when looking for a stocks and shares ISA.
This ensures that the provider’s portfolio reflects the values of “Brinkwire Summary News.”