New figures from HMRC reveal that the total value of unclaimed Child Trust Funds (CTFs) has now exceeded £1.5 billion.
CTFs were introduced in January 2005 by the Labour government as a way to encourage long-term saving for children. However, the scheme was short-lived, ending in 2011 under the Conservative–Liberal Democrat coalition. While budget constraints played a major role in its cancellation, the initiative also struggled to gain widespread public engagement. In fact, more than a quarter of all accounts were opened automatically by HMRC after parents or guardians failed to take action.
Between 1 September 2002 and 2 January 2011, the government contributed around £2 billion to accounts for 6.3 million children, with families able to top up the accounts, initially up to £1,200 per year, now increased to £9,000. In practice, most accounts received only the initial government payment of £250, with an additional £250 for children who turned seven before 3 January 2011, when government contributions ceased (though the accounts themselves remained active).
These payments were issued as vouchers sent to parents or guardians, but many went unused, leading to a high number of HMRC-opened accounts. In hindsight, this lack of engagement foreshadowed the challenges now seen as these accounts reach maturity at age 18.
As of 5 April 2025, HMRC reports 758,000 matured CTFs remain unclaimed or transferred, over 60% of which matured more than a year ago. The average value of these accounts is around £2,000, with 27,000 accounts holding £10,000 or more.
To locate a CTF, individuals can use HMRC’s online CTF locator tool, which identifies the account provider but does not disclose the account’s value.
Once matured, a CTF enjoys the same tax-free status as an ISA. However, for those looking to continue investing, transferring the funds into a new ISA may offer broader investment options and potentially lower fees.
A few important reminders for investors:
- Investing in shares should be considered a long-term strategy and aligned with your personal risk tolerance and financial goals.
- Investment values and income can fluctuate, and you may not get back the original amount invested, even with tax advantages.
- While ISAs shield income and gains from personal tax, they may still incur unrecoverable tax on income received by ISA managers.
- Stocks and Shares ISAs typically invest in corporate bonds, equities, and other assets that can vary in value.
- Tax treatment depends on individual circumstances and may change over time.
- The Financial Conduct Authority does not regulate tax advice.
5th December 2025
