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Latonya Skye-Patterson, a 20 year old woman with long, auburn hair sits in a cafe looking at the camera. Latonya only learned she had a Child Trust fund when a tutor at her college told her about the scheme.
Latonya Skye-Paterson had no idea a Child Trust Fund had been set up for her until her college tutor suggested she check online. “I found I had £955 in there, which is a lot. A lot more than I was expecting… it helped me so much,” she said.
New figures suggest £1.4 billion belonging to 728,000 people is ready to be claimed now they have turned 18 – but many do not know the accounts exist, according to a charity that traces lost funds.
Now a senior MP is backing calls for pay-outs to be made automatically for some of these accounts – a plan the government says would be complex and costly.
Latonya, 20, is one of 6.3m people born between Sept 2002 and Jan 2011 who had a child trust fund kick started by a payment, usually £250, from the government.
The idea was the long-term tax-free savings pot would go up in value by their 18th birthdays.
The average amount in Child Trust Funds is estimated to be around £2,000 because of growth over the years and extra money put in by family and friends.
But like hundreds of thousands of others, when Latonya turned 18 she had no idea her fund existed.
Sir Geoffrey Clifton-Brown is an MP who also chairs Parliament’s Public Accounts Committee. Speaking in his role as an MP he told Radio 4’s Money Box he backs the automatic pay-out idea.
“I liken this money a bit to a treasure trove buried on a [desert] island in vast acres of sand expecting the poor recipients on these child trust funds to go and find this money,” he said.
“I think there’s a lot more we could do to encourage the government to find the recipients.”
HMRC said it was grateful for the suggestion of the “default withdrawal at 21” plan from The Share Foundation but said the proposal was complex and could not be implemented easily.
For HMRC to close these accounts, obtain the savings in those accounts and transfer them with or without the owner’s consent would require careful legal consideration, they added.
The government is committed to reuniting all young adults with their CTFs and recognises the importance of ensuring that young adults can benefit from these funds as they reach adulthood.
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