My Kid's Been Sitting on £2,200 This Whole Time (And I Had No Clue)

By HOAR Team 4 July, 2025 6 mins read 73 Views

So here's something that made me feel like parent of the year... NOT.

Turns out there's potentially £2,200 just sitting there in some forgotten account that belongs to my teenager. Along with literally hundreds of thousands of other young people who have zero idea they're basically mini-millionaires (okay, maybe not millionaires, but you get it). HMRC just dropped this bombshell that there's £1.4 billion - yes, billion with a B - waiting to be claimed by 671,000 young people who probably think they're broke.

These mystery accounts are called Child Trust Funds, and if your kid was born between September 2002 and January 2011, they might have one. The government basically set them up for every child during that period, then apparently forgot to mention it to half the parents.

The average pot is worth £2,212, which honestly could cover my son's gaming habit for... maybe three months?

Listen Now

Wait, How Do I Even Find This Thing?

HMRC posted on X (still calling it Twitter in my head): "If your child is between 18 and 22, they can cash in their #ChildTrustFund. The average amount claimed is £2,200." Thanks for the heads up, guys. Only took you, what, 15 years to really push this?

You can check on the HMRC website at gov.uk/child-trust-funds/find-a-child-trust-fund. Pretty straightforward, actually.

You need to be over 16 or a parent to use the service. For checking your child's account, you'll need their full name, address, and date of birth. For yourself, add your National Insurance number to that list.

Here's the annoying part though - the tool only tells you which provider holds the account, not how much is actually in there. It's like being told you won the lottery but not knowing if it's £5 or £5 million.

After you fill out the form, HMRC sends you a letter with the details. Online applications take about three weeks, postal ones drag on longer (because apparently it's still 1995 somewhere in their offices). If you don't hear back within six weeks, you'll need to chase them up.

So What Can You Actually Do With This Cash?

Most people do one of three things: transfer it to a bank account, invest it, or move it into an ISA.

The easiest route? Ask your Child Trust Fund provider to dump the money straight into your bank account. Just hand over your bank details and boom - done.

If you're feeling fancy and want to invest it, you can transfer the whole lot into an ISA for tax-free savings. Here's a neat trick: when you transfer money from a Child Trust Fund into an adult ISA, it doesn't count towards your £20,000 annual ISA limit for over-18s. Free money that doesn't eat into your allowance? Yes please.

For the under-18 crowd, Junior ISAs are usually the smarter move.

According to AJ Bell, Junior ISAs typically have lower fees and more investment options than Child Trust Funds. The money stays locked until you turn 18, but you still get all those lovely tax-free benefits. Plus, you can transfer the full Child Trust Fund amount into a Junior ISA adn still add up to £9,000 more in the same tax year.

Honestly, I'm kicking myself for not knowing about this sooner. My daughter's been complaining about being skint for months, and there might be over two grand just sitting there with her name on it.

Time to have that awkward conversation about how Mum and Dad maybe aren't as on top of things as we pretend to be.

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 are the benefits of having an emergency fund?

An emergency fund provides financial security by offering a safety net for unexpected expenses, such as medical emergencies or job loss. It helps prevent debt accumulation, reduces stress, and allows for better financial planning, ensuring that individuals can navigate unforeseen circumstances without significant hardship.

What are the risks associated with investing in the stock market?

Investing in the stock market involves several risks, including market volatility, economic downturns, and company-specific factors that can lead to losses. Investors may also face liquidity risk, where they cannot sell an investment quickly without incurring a loss. Diversification and thorough research can help mitigate these risks.

How can I budget my money effectively?

To budget effectively, start by tracking your income and expenses to understand your spending habits. Set realistic financial goals, categorize your expenses, and allocate funds accordingly. Regularly review and adjust your budget to ensure it reflects your current financial situation and objectives.

How can I improve my credit score?

To improve your credit score, make timely payments on all debts, reduce credit card balances, avoid opening unnecessary credit accounts, and regularly check your credit report for errors, disputing any inaccuracies. Maintaining a mix of credit types and keeping old accounts open can also be beneficial.

What is the definition of money?

Money is a medium of exchange that facilitates transactions for goods and services. It serves as a unit of account, a store of value, and a standard of deferred payment, allowing individuals to compare the value of diverse products and services.

How can I start saving for retirement?

To start saving for retirement, begin by establishing clear retirement goals and determining how much you need to save. Contribute to employer-sponsored retirement plans, such as a 401(k), and consider opening an Individual Retirement Account (IRA). Regular contributions and taking advantage of compounding interest can significantly boost your retirement savings over time.

Statistics

A survey by the American Psychological Association found that 72% of Americans reported feeling stressed about money at some point in the past month.
According to the Federal Reserve, approximately 39% of Americans do not have enough savings to cover a $400 emergency expense.
According to the World Bank, around 1.7 billion adults worldwide remain unbanked, lacking access to basic financial services.
According to a survey by the Financial Industry Regulatory Authority (FINRA), about 66% of Americans could not correctly answer four basic financial literacy questions.
A study by the National Endowment for Financial Education found that 60% of Americans do not have a budget.
According to a Gallup poll, 56% of Americans report that their financial situation is better than it was a year ago.
In 2020, the average retirement savings for Americans aged 60 to 69 was approximately $195,000, according to Fidelity.
As of 2021, the average student loan debt for recent graduates was approximately $30,000, according to the Federal Reserve.

External Links

How To

How To File Your Taxes Accurately

Filing your taxes accurately is essential to avoid penalties and ensure compliance. Start by gathering all necessary documents, including W-2s, 1099s, and any receipts for deductible expenses. Choose the appropriate filing method, whether using tax software, hiring a tax professional, or filing manually. Familiarize yourself with the tax deductions and credits available to maximize your refund or minimize your liability. Double-check your calculations and ensure all information is accurate before submission. If you are unsure about specific items, consider consulting IRS guidelines or a tax professional for clarification. Lastly, keep copies of your tax returns and supporting documents for future reference.

Did you miss our previous article...
https://hellofaread.com/money/julys-restaurant-bloodbath-when-your-favorite-spots-just-disappear