Child Trust Funds: what they are, what happens at 18 and how to claim

A Child Trust Fund is a tax-free savings or investment account the government set up for children born between 1 September 2002 and 2 January 2011¹. Each eligible child received an initial government deposit of at least £250, and if a parent or guardian did not open an account, the government opened one automatically on the child's behalf¹. An estimated 6.3 million accounts were set up between 2002 and 2011 to encourage young people to become future savers².

The scheme is now closed to new accounts, but existing accounts keep running, and money can still be paid into them, up to £9,000 a year, tax-free³. The average account was worth £2,642 in April 2026⁴. The catch is that hundreds of thousands of young adults have never claimed theirs: as of 5 April 2026, around 827,000 matured accounts were still sitting unclaimed with providers⁴.

What a Child Trust Fund is and who has one

A Child Trust Fund (CTF) is a long-term tax-free savings account for children born on or between 1 September 2002 and 2 January 2011¹. To be eligible, the child had to be born in that window, living in the UK and not subject to immigration control¹. The account is held in the child's own name: the law requires the terms of a Child Trust Fund to secure that it is held in the name of a child⁶, and each account is the account of a single named child, with no child allowed to hold more than one⁷.

The money in the account belongs to the child, not to the parents. A parent, guardian or another responsible person manages the account as the "registered contact" until the child is old enough to take over, but their role is to look after the account, not to draw on it⁶. The law states that where there is one person with parental responsibility for the child, that person has the authority to manage the fund⁶.

The scheme was introduced in 2005, with accounts opened retrospectively for children born from September 2002⁸. Over 6 million children had a Child Trust Fund at the scheme's height⁹. If a parent or guardian never opened one, HM Revenue and Customs (HMRC) opened one automatically and allocated it to a provider, which is why many families do not know an account exists¹. Accounts may only be held with providers approved by HMRC, and the government publishes a list of authorised Child Trust Fund providers¹⁰.

The scheme closed to new applications, and new accounts for children are now opened as Junior ISAs instead³. A child cannot hold a Child Trust Fund and a Junior ISA of any type at the same time¹¹.

The government payment: £250, or £500 for lower-income families

Most children received around £250 from the government at the time their account was set up⁵. Children from low-income families and children in local authority care received an additional £250, taking the total to around £500⁵. The legislation behind the scheme provided for a £250 government endowment for each child, together with an additional endowment of £250 for children in families on low incomes¹². In total, 2.2 million children, 36% of those eligible, received these additional government payments⁵.

The payment was made by voucher, sent by post to the person entitled to Child Benefit for the child⁷. The voucher carried the child's full name, date of birth, a unique reference number, an expiry date and the amount of the initial contribution, and could not be exchanged for money⁷. Parents then chose a provider and used the voucher to open the account; if they did not act before the voucher expired, HMRC opened the account for them¹.

The government also paid a further contribution into some accounts when the child turned seven, and children in low-income families or local authority care received an additional £250 at that point too⁵. Those early payments, plus anything family and friends added, plus investment growth, are what make up the account's value today. The average Child Trust Fund is worth approximately £2,200 based on HMRC data published in September 2025¹, and the official statistics put the average market value at £2,642 in April 2026⁴.

Types of Child Trust Fund: cash, stakeholder and shares

There are three types of Child Trust Fund: cash, stakeholder and shares-based¹³. In the legal framework, accounts are divided into stakeholder accounts, which must meet conditions set out in the regulations, and non-stakeholder accounts, which do not⁷.

• Cash accounts hold the money as savings, like a normal savings account, with interest added tax-free.
• Stakeholder accounts invest the money, usually in shares, with rules designed to keep charges within limits and to reduce risk as the child approaches 18.
• Shares-based accounts invest in the stock market, so the value can fall as well as rise.

The type of account matters for what it is worth now. The official statistics show the difference: as of April 2026, the average market value of stakeholder accounts was £2,521, while non-stakeholder accounts averaged £2,855⁴. Which type a child ended up with depended on the choice their parents made, or, if HMRC opened the account automatically, on the stakeholder account HMRC allocated¹.

Shares-based accounts invest in funds, and there are many types of fund, such as investment trusts, unit trusts and exchange traded funds (ETFs)¹⁴. The value of these investments moves with the market, so two accounts that started with the same £250 can be worth quite different amounts today. Money in a shares-based Child Trust Fund is not guaranteed, and the amount available at 18 depends on how the underlying investments have performed.

Paying in: up to £9,000 a year, tax-free

Existing Child Trust Funds can still receive money, up to £9,000 a year³. The limit applies to the account as a whole, not per person, so subscriptions from parents, grandparents, friends and the child themselves all count towards the same £9,000³. There is no tax to pay on the income the account earns or on any profit it makes³.

Anyone, including parents, grandparents or family friends, can make one-off or regular investments into a Child Trust Fund¹⁵. Providers offer different ways to pay: for example, Healthy Investment accepts one-off or regular additional investments made online, by cheque or by direct debit, with payments also possible by bank transfer¹⁵.

The £9,000 yearly limit is shared with the Junior ISA rules, and the two schemes work the same way on this point. The official statistics show how much is actually being paid in: in the tax year 2025 to 2026, the average subscription to stakeholder accounts was £605, while the average subscription to non-stakeholder accounts was lower⁴. Most accounts receive far less than the full allowance, and 223,000 accounts received between £0.01 and £249 in the tax year 2025 to 2026⁴.

Moving a Child Trust Fund to a Junior ISA or another provider

While the child is under 18, there are three options for the account: leave the money with the current provider, transfer the account to a different Child Trust Fund provider, or move the money into a Junior ISA¹⁶. Once money has been moved into a Junior ISA it cannot go back into a Child Trust Fund later¹⁶.

Transfers to Junior ISAs have been possible since the government took legislative powers, announced at Budget 2013, to enable the voluntary transfer of savings from a Child Trust Fund to a Junior ISA¹⁷. The transfer process is done between providers: you open a Junior ISA with the new provider and ask them to handle the transfer, and you will need the details of your current provider and the account number¹⁸. The whole Child Trust Fund amount must be transferred into the Junior ISA, and a child cannot hold a Child Trust Fund and a Junior ISA at the same time¹⁹.

The residency requirement only applied at the point the Child Trust Fund was opened, so a CTF can be transferred into a Junior ISA even if the child is no longer UK resident²⁰. The dedicated guide to moving a Child Trust Fund into a Junior ISA covers the process step by step, and Junior ISAs explained covers how the receiving account works.

Control at 16, money at 18

The money belongs to the child, and they can only take it out when they turn 18³. At 16, the child can take control of the account³. NS&I puts it plainly: once you turn 16, you can take control of the account, but it is not until you turn 18 that you can take out any money¹.

The law behind this is set out in the Child Trust Funds Act 2004. If the child is 16 or over and has elected to manage the Child Trust Fund, the child has the authority to manage it, and the registered contact ceases to have authority to manage the account⁶. A contract entered into by or on behalf of a child who is 16 or over in connection with a Child Trust Fund has effect as if the child had been 18 or over when it was entered into⁶.

From the government's opening deposit to withdrawal at 18.

Taking control at 16 means the young person can make decisions about the fund, including where it is invested and whether to transfer it¹³. Providers handle the handover differently: Ulster Bank, for example, states the child can take over responsibility for the account at 16, but will not be able to access its online portal until they are 18²³. Between 16 and 18, the account holder can also use the government's tracing service themselves, and MoneyHelper encourages 16 to 18 year olds to find out about their Child Trust Fund before maturity²⁴.

What happens when a Child Trust Fund matures

Child Trust Funds began to mature in September 2020, when the eldest children with CTFs turned 18³. On the account holder's 18th birthday the account matures, and from that point the money belongs to them outright and can be withdrawn or reinvested.

What happens next depends on the provider. If nothing is done with the money, the CTF provider will transfer it to an ISA, if they offer one; otherwise, the funds are transferred into a tax-free "protected account"¹³. The regulations made in 2020 set out the framework for these matured accounts, which can be a cash account or a stocks and shares account receiving a transfer under the Child Trust Funds Regulations²⁵. Ulster Bank, for example, tells its account holders that on their 18th birthday the investment moves into a Matured CTF, keeping the money invested in the same fund until instructions are given²³.

At maturity, control passes entirely to the young account holder. An instruction can only be accepted from the account holder, the child as was, and the matured CTF can be transferred to any type of ISA with any ISA manager, or to an ISA with the CTF provider if they offer one²⁰. Parents cannot direct the money from this point, even if they were the registered contact throughout.

The money stays tax-free whatever the holder does with it, provided it stays within an ISA or the protected account. Once withdrawn into a normal bank account, it becomes ordinary savings, and any interest or returns from that point follow the usual tax rules, covered in ISAs and tax: what is tax free and what is not.

How do I find my Child Trust Fund?

If you were born between 1 September 2002 and 2 January 2011, you may have a Child Trust Fund²⁶. Many people do not know their account exists, because their parents never opened one deliberately and HMRC did it automatically¹.

The way to find out is the government's free Child Trust Fund finder tool on gov.uk¹. The tool asks HMRC to locate the provider, and you will need a Government Gateway account to use it¹³. HMRC will send you the details of your provider by post within three weeks of your request¹⁸. HMRC tells you who holds the account, not how much is in it; you then contact the provider, pass their identity checks and ask about the balance.

The step-by-step version:

1. Check you were born between 1 September 2002 and 2 January 2011²⁶.
2. Use the free Child Trust Fund finder tool on gov.uk, signing in with Government Gateway¹.
3. Wait for HMRC's letter, which arrives by post within three weeks and names the provider¹⁸.
4. Contact the provider and complete their identity checks.
5. Ask for the current value and your options: withdraw, transfer to an ISA, or leave it invested.

The full walkthrough, including what to do if the provider has closed or changed name, is in how to find a lost Child Trust Fund. Which? notes that tracing services run by other organisations have changed over time, with Experian closing its own tracing service, so the gov.uk tool is the route that is guaranteed to be free²⁷.

Around 827,000 matured accounts are unclaimed

As of 5 April 2026, there were around 2.9 million open Child Trust Fund accounts, of which around 827,000 were matured accounts continuing as CTF accounts, still waiting to be claimed⁴. Between September 2020 and April 2026, around 3,784,000 accounts matured in total, of which around 2,958,000 were claimed or automatically transferred to an ISA⁴. The gap between those two figures is the unclaimed money.

The average market value of a matured account still continuing as a CTF was £2,310 as of April 2026⁴. By contrast, matured accounts that were claimed or automatically transferred to an ISA in 2025 to 2026 had an average market value of £3,596⁴, which suggests the accounts still sitting unclaimed tend to hold smaller sums, often just the original government money with little or no family contributions added.

The problem is not new. The National Audit Office investigated Child Trust Funds in 2023 and found that by April 2021, only around 175,000 of 320,000 18-year-olds had claimed their money⁵. Which? reported more than 750,000 unclaimed accounts in April 2026¹⁶, and the government has since set up a dedicated taskforce to reunite young adults with forgotten Child Trust Fund savings, with letters nudging account holders sent in April².

Claiming for someone who lacks capacity, is terminally ill or has died

Some Child Trust Funds cannot follow the standard route because of the account holder's circumstances, and the rules provide for these cases.

Children in care and adopted children. Where a child is looked after by a local authority, the person appointed by the Treasury or the Secretary of State has authority to manage the account, in circumstances set out in the regulations, including a continuous period of at least twelve months in care²¹. The Share Foundation manages Child Trust Funds for looked-after children alongside its role managing the Junior ISA scheme for them²⁸. The government publishes guidance for carers and adoptive parents on how to take over management of a Child Trust Fund or Junior ISA account when they are granted formal parental responsibility²⁹. In Scotland, mygov.scot sets out benefits and money help for young people with experience of care²⁶.

Terminal illness. The scheme's rules allow early access to the money in cases of terminal illness, which is the main exception to the rule that nothing can be withdrawn before 18. A claim of this kind is made through the provider, with medical evidence. The definition of terminal illness used in comparable Scottish benefits legislation is a progressive disease that can reasonably be expected to cause the individual's death, in the judgement of an appropriate healthcare professional³⁰; Child Trust Fund providers apply their own claims process, and the account holder's family should contact the provider directly in the first instance.

Lack of capacity. Where a young person turns 18 but lacks the mental capacity to manage the account, a parent or other person cannot simply continue as before, because the registered contact's authority ends at maturity. Someone else must be appointed to act for the account holder, and the provider will need evidence of that authority. The site's guide to managing an ISA for someone who lacks mental capacity explains the wider framework.

Death of the account holder. If a child or young account holder dies, the account forms part of their estate and is dealt with under inheritance rules. The provider should be contacted directly, and the general guide to what happens to an ISA when someone dies covers the position for the ISA wrapper that a matured fund may sit in.

Complaints and where to get free help

If a provider loses a transfer, delays a claim, or gives poor service, the first step is to complain to the provider directly. If the complaint is not resolved, it can be taken to the Financial Ombudsman Service, which is free to use. The site's guide to complaining about an ISA provider sets out the process.

Free, impartial help is available from MoneyHelper, the government-backed money guidance service, which provides information about Child Trust Funds for 16 to 18 year olds and their families²⁴. Which? also publishes free guidance on tracking down unclaimed Child Trust Funds¹⁶. For help with the wider decisions at 18, such as whether to keep the money in an ISA, the guides to how an ISA works and taking money out of an ISA cover the mechanics without recommending any particular course.