A little-known fee associated with Child Trust Funds could result in individuals missing out on significant amounts of money. Child Trust Funds are savings accounts available to young people aged between 18 and 22, with the average account holding a substantial £2,212. These tax-free accounts were set up for every child born from September 1, 2002, to January 2, 2011, with an initial government deposit of £250. Account control can be taken from the age of 16, and funds can be accessed once the individual turns 18.
Unlike government-held funds, these savings are held by banks, building societies, or other financial institutions until they are withdrawn or reinvested. It is recommended that individuals contact their provider directly if they are aware of who it is. Otherwise, the government’s online tool can help locate the account using the National Insurance number and date of birth. Some firms offer to track down Child Trust Funds on behalf of the account holders, but they charge for this service, with fees reaching up to £350 or 25% of the account’s value. However, using these agents can reduce the amount of money received, and the process is often longer. Account holders will still need to provide the same information to the agent as they would if they were searching for the account themselves.
According to Gavin Oldham of The Share Foundation, if you are between 18 and 21 years old, the government would have set money aside for you shortly after birth. This investment would have grown significantly, and it is in your name. The Share Foundation has connected over 65,000 young people to their Child Trust Fund accounts. It is free and easy to find out where your money is located. Visit findCTF.sharefound.org or GOV.UK to locate it today.
Hidden bank charges in Child Trust Fund accounts can add up to hundreds of pounds in fees. Since these accounts are primarily held by banks, they are subject to bank charges and fees that can slowly deplete the savings, resulting in less money when it is finally withdrawn. One customer, Max Prince, reported to the BBC that his account only had £12.39 left when he tried to withdraw the cash. The investment firm managing the account, Columbia Threadneedle, had applied a £30 annual charge that significantly reduced the savings. However, a spokesperson for the firm mentioned that their funds require customers to actively make their own investment decisions, and without authorization and communication from customers, they cannot take action on their behalf.
For more information on Child Trust Funds and how to access savings, visit GOV.UK. It is essential for account holders to be aware of any potential hidden fees and charges that could impact the overall amount of savings in their accounts. Checking with the provider directly and staying informed can help individuals avoid unnecessary costs and ensure they receive the full benefits of their Child Trust Fund accounts.