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Gloucestershire Business News

Thousands of teenagers to get access to pot of cash

Teenagers across the county are set to benefit for the first time from money in Child Trust Funds (CTFs) which has been waiting for them since they were babies.

Since 2002, 6.3 million CTF accounts have been set up - around 4.5 million of them by parents or guardians. In the South West alone, there are approximately 463,000 accounts.

Around 1.8 million accounts nationally were set up by HMRC, because parents or guardians didn't open an account. This means some children don't know there are accounts in their name and are unaware their money is waiting for them.

From 1st September 2020, the oldest children will turn 18 and be able to access their money. Around 55,000 accounts will mature each month and HMRC has created an online tool to help young people find out where their account is held. If a parent or guardian is unsure of where their child's CTF account is held they can also use this tool.

For people who don't have the identifying information required to access the tool, HMRC will provide alternative, non-digital routes to finding a CTF provider upon request. HMRC will send details of the CTF provider by post within three weeks of receiving a request.

John Glen, economic secretary to the Treasury, said: "We want to make sure all young people can access the money which has been set aside for them, to invest in their future and continue a savings habit, as they turn 18. If you're unsure if you have an account or where it may be, it's easy to track down your provider online."

CTFs were set up for children born between 1st September 2002 and 2nd January 2011, with a live Child Benefit claim. Parents and guardians received a voucher to deposit in a Child Trust Fund (CTF) account on behalf of the child. At 16 years, the child can choose to operate their account or have their parent continue to operate it, but they cannot withdraw the funds. At 18 years of age, the CTF account matures and the child is able to withdraw money from the fund or move it to a different savings account. Over 700,000 accounts will mature each year.

The accounts are not held by HMRC, but by a number of CTF providers who are financial services firms. Anyone can pay into the account, with an annual limit of £9,000 and there's no tax to pay on the CTF savings interest or profit.

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