God. I nearly spat out my coffee when I saw the numbers. £1.4 BILLION just sitting there unclaimed. That's not a typo—billion with a B. And it belongs to actual young people who probably have no clue it exists.
I stumbled across this while doom-scrolling Twitter (sorry, "X"—still can't get used to calling it that) last night around 2am. HMRC posted this warning that's basically saying "Hey, if you were born between 2002 and 2011, there might be a pile of cash with your name on it."
The Money You Didn't Know You Had
So here's teh deal. If you were born between September 1, 2002 and January 2, 2011, the government literally created a savings account for you. Not kidding. They dropped £250 into it (or £500 if your family wasn't well off), and then another chunk when you turned seven.
My cousin's kid just found out she had one worth nearly £2,200. Her reaction? "Does this mean I can finally afford a festival ticket AND somewhere to stay?" Youth priorities, I guess.
Why is nobody claiming this stuff?!
Simple answer: most people have absolutely no idea these accounts exist.
Longer answer: The whole Child Trust Fund scheme got scrapped back in 2011 (thanks, austerity), and replaced with Junior ISAs. Many parents either forgot about the accounts or never knew they existed in the first place—especially if the government automatically opened one because parents didn't choose a provider.
That's how we ended up with 728,000 young adults who could be walking around with unclaimed cash. Let that sink in.
Finding Your Lost Money Stash
Listen. If you were born in that timeframe, or you've got a kid who was, checking is dead simple.
Head to tax.service.gov.uk/guidance/ask-HMRC-to-find-a-Child-Trust-Fund/start/about-this-page and follow the steps. You'll need your National Insurance number, name, address—the usual suspects.
Parents can do this for kids under 18 too. You just need their details instead of yours.
HMRC will send you a letter (how very 2005 of them) within about three weeks telling you which provider has your money. They won't tell you how much is in there though—that would be too straightforward, wouldn't it?
What's Actually In These Forgotten Accounts?
Back in the day, the government put in at least £250 for every child. Low-income families got £500. Then at age seven, another payment went in.
In 2010, they cut it down to £50 or £100 before killing the whole thing off in 2011.
The clever bit? This money wasn't just sitting there—it was invested in shares. So depending on how the market performed, some accounts could be worth significantly more than the initial deposit.
I spoke to my neighbor's daughter last weekend who just turned 18. She claimed her fund expecting maybe £300-400. Ended up with over £1,100. Not life-changing, but certainly a nice surprise for someone just starting uni.
So You've Found Your Cash... Now What?
You can only touch this money when you turn 18. That's the rule.
Once you hit that magic birthday, you've got options. Most people just transfer it to their bank account (hello, holiday fund). Others are smarter than I was at 18 and invest it or move it into an ISA.
If I'd had this at 18, it would've gone straight on a used car that broke down three months later. Poor financial decisions are a rite of passage, right?
Worth noting—you can actually take control of the account at 16, but you can't withdraw until 18. So you could, in theory, start making investment decisions earlier.
The Forgotten Generation's Windfall
It's wild to think an entire generation has money they don't know about. In an era where everyone's struggling with the cost of living, finding out you've got a couple grand sitting in an account somewhere must feel like winning a mini-lottery.
If you were born in that timeframe, check. It takes five minutes. Seriously.
And if you're a parent who vaguely remembers something about this but never followed up—your kid might thank you for the reminder.
Or they might ask why you didn't tell them sooner. Teenagers, eh?
Frequently Asked Questions
What is the difference between saving and investing?
Saving typically involves setting aside money in a secure account for short-term needs or emergencies, while investing involves using money to purchase assets like stocks or real estate with the expectation of generating a return over the long term. Investing carries higher risks but offers the potential for greater rewards.
What is the role of central banks in the economy?
Central banks manage a nation's currency, money supply, and interest rates. They implement monetary policy to control inflation, stabilize the currency, and foster economic growth. They also serve as lenders of last resort to the banking system during financial crises.
What is a budget deficit?
A budget deficit occurs when a government's expenditures exceed its revenues over a specific period, usually a fiscal year. This can lead to increased borrowing and national debt if not addressed through spending cuts or revenue increases.
What are credit scores and why are they important?
Credit scores are numerical representations of an individual's creditworthiness, calculated based on credit history, payment behavior, and debt levels. They are important because they impact the ability to obtain loans, credit cards, and favorable interest rates, affecting overall financial health.
How does inflation affect the value of money?
Inflation refers to the general rise in prices over time, which erodes the purchasing power of money. As inflation increases, each unit of currency buys fewer goods and services, meaning that the value of money decreases in terms of what it can purchase.
What are the main functions of money?
The primary functions of money are as a medium of exchange, facilitating trade; a unit of account, which provides a standard measure of value; a store of value, allowing individuals to save and transfer purchasing power over time; and a standard of deferred payment, enabling credit transactions.
What is the importance of financial literacy?
Financial literacy is essential for making informed decisions about budgeting, saving, investing, and managing debt. It empowers individuals to understand financial concepts, evaluate risks, and navigate complex financial products, leading to better financial stability and long-term wealth building.
Statistics
- The average return on investment for the S&P 500 over the past 90 years is about 10% per annum.
- According to the World Bank, around 1.7 billion adults worldwide remain unbanked, lacking access to basic financial services.
- A survey by the American Psychological Association found that 72% of Americans reported feeling stressed about money at some point in the past month.
- The average cost of raising a child in the U.S. is estimated to be around $233,610, according to the U.S. Department of Agriculture.
- Research by the National Bureau of Economic Research found that individuals who receive financial education are 25% more likely to save than those who do not.
- According to the Federal Reserve, approximately 39% of Americans do not have enough savings to cover a $400 emergency expense.
- A report by Bankrate indicated that only 29% of Americans have a written financial plan.
- A study by the National Endowment for Financial Education found that 60% of Americans do not have a budget.
External Links
How To
How To Develop a Good Saving Habit
Developing a good saving habit begins with setting clear financial goals. Determine what you are saving for, whether it’s an emergency fund, a vacation, or retirement. Start by automating your savings; set up a direct deposit from your paycheck into a savings account. Aim to save at least 20% of your income, gradually increasing this amount as you become comfortable. Track your spending to identify areas where you can cut back and redirect those funds to your savings. Regularly review your savings progress and adjust your contributions as necessary to stay motivated and achieve your goals.
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