Child trust funds to become available for the first time ever – HMRC update claiming rules | Personal Finance | Finance
Child Trust Funds were originally set up for children born between September 2002 and January 2011. They can have up to £9,000 saved into them a year and the money held within them will officially belong to the child being saved for. The money can only be taken when the child in question turns 18 but they can take control of the account when they turn 16.
Today, the HMRC revealed that millions of teenagers are set to benefit for the first time from the money held in CTFs.
They detailed that since 2002 around 6.3 million CTF accounts have been set up, with roughly 4.5 million being opened by parents or guardians with the remaining 1.8 million being set up by HMRC themselves where parents did not open an account.
This could mean that some children may not know that there are accounts in their name and as such, are unaware that money is waiting for them.
From September 1, the oldest children affected by CTFs will turn 18 and be able to access their money.
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HMRC have made the ability to hunt down CTF accounts easier by changing some of the rules associated with them.
They recognised that the online form that they provided to customers to trace their CTFs requires a level of identity verification that many 16 to 18 year olds will not have.
As such, they will now allow the children to access the form with just their National Insurance number.
For those who wish to continue adding money into a CTF, they’ll be able to do so by cheque, standing order or direct debit for stakeholder accounts.
Junior ISAs can be opened by those who do not have a CTF but are looking to build up a nest egg for their children.
Junior ISAs can have up to £9,000 saved into them in the current tax year and the child being saved for must be under 18 and be living in the UK.
These accounts can be opened with a range of banks, building societies, credit unions, friendly societies and stock brokers.
Children can have either a cash or stocks or shares ISA but they’ll only be allowed to have one of each as a maximum.