Up to one million British children are owed £1.5 billion of public funds — but are now at risk of losing the money.
Six million children aged nine to 17 are entitled to cash under the now defunct Child Trust Fund (CTF) scheme, which was designed to give youngsters a nest egg as they embark on adult life.
Under the scheme, children born from September 1, 2002 to January 2, 2011 received between £200 and £500 to put in a tax-free Child Trust Fund account.
Lost funds: Six million children aged nine to 17 are entitled to cash under the now defunct Child Trust Fund scheme
Those at the older end of this age range were also given a second payment on their seventh birthday, which meant that children from poorer backgrounds, who received £500 each time, were entitled to up to £1,000 of Government funds.
However, MPs have now warned that one in six of those youngsters is set to miss out on the cash because the Government has ‘lost’ track of them.
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HMRC claims that 700,000 accounts are now dormant, while other analysts estimate closer to one million were ‘lost’.
Analysis by stockbrokers The Share Centre shows that accounts whose owners can’t be traced are worth nearly £1.5 billion. It also found around half of that money is owed to children from the poorest families. Labour MP Helen Goodman says: ‘Whereas only 6 per cent of wealthy children are losing out: for those on child tax credits, four in ten have been lost.’
Miss Goodman, who will debate CTFs with Treasury ministers today, says the Government needs to ‘sort this out now so that every young person gets their money’.
She adds: ‘The amounts per child will be as much as £1,600 — enough to pay for a course or a student’s rent for several months.’
People can check if they or their children have a Child Trust Fund by searching for it via the HMRC website. HMRC denies the accounts are ‘lost’.
A spokesman says: ‘All CTFs are being managed by CTF providers — either by the original provider or a subsequent provider where the funds have been transferred.’
He adds: ‘HMRC have developed an online tracing tool and amended the National Insurance number notification letter to 16-year-olds to include details about how CTFs can be located.
The Government is also working with industry to encourage CTF holders to re-engage with their accounts. If any account holders are unable to retrieve account details online, they are encouraged to contact HMRC .’