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What will happen to the Child Trust Fund at the age of 18?


In 2005, the UK government launched the Child Trust Fund (CTF) so that parents could save for their child’s future. The idea behind this scheme was that all the kids would be given a financial home egg, on which they could depend on at the age of 18.

You may be wondering what the child will be at the age of 18 with this fund. Here’s what you need to know.

How does the Child Trust Fund work?

Child Trust Funds are primarily tax-free savings accounts for children born between 1 September 2002 and 2 January 2011.

Under the scheme, parents and guardians receive a voucher of £ 250 (or £ 500 for low-income families) from the government for setting up an account for their children. If the voucher is not used within one year, HMRC will set up a CTF for the child on behalf of the voucher holder.

The project was canceled in 2010 and replaced by Junior ISA. Existing Child Trust Fund accounts are still in operation and will probably continue to earn interest or investment income. At this point, parents and guardians can add up to সি 9,000 a year to a CTF account.

What will happen to the Child Trust Fund at age 16?

When a child turns 16, they can legally take charge of their Child Trust Fund. They may decide on funding, such as moving to another provider or transferring to Junior ISA. However, they cannot raise money at this stage.

Those who do not want to manage the funds can let their parents or guardians manage the funds.

What will happen at 18?

When the child turns 18, the Child Trust Fund matures and they are free to withdraw money into the fund.

If the child’s contact details are up to date, their provider will be contacted just before the age of 18M Birthday and asked what they want to do with the money. Generally, there are three options:

  1. Withdraw all money invested in the fund.
  2. Transfer funds to a cash ISA or a stock and ISA shares and continue earning interest or returns while enjoying protection from taxes.
  3. A combination of both – transfer some of your money to an ISA and withdraw the rest.

If the provider is unable to catch the beneficiary, or if they do not respond, the funds will be led to a tax-free savings account and kept there until they are contacted.

Can you have a CTF that you don’t know?

The first recipients of the Child Trust Fund voucher turned 1 year old in September 2020, meaning they were able to access their money.

However, it is estimated that about 1.9 million parents forgot to invest CTF vouchers for their children (HMRC invests vouchers on their behalf). Other parents may have opened a CTF account for their children by cashing in vouchers and then forgotten about them.

As a result, a good number of children who have reached or are about to reach the age of 18 could be lost in a storm worth thousands of pounds.

No need to worry. Kids, parents and guardians have a way to track these lost or forgotten accounts.

  • Go to the government portal and log in using your official gateway ID. If you do not have one, you can create one.
  • Fill in the details including your (or your child’s) name, address, date of birth, phone number and national insurance number.
  • HMRC will send you your CTF account details within three weeks. If they need more information, they will contact you.
  • Contact the CTF provider and access the account.

Still have questions?

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