As of September 1 2020, millions of teenagers can access up to £2,400, as Child Trust Funds start to mature for the firs time.
According to HMRC, around 6.3million child trust funds have been set up since 2002.
For the first time since the fund was created, people will start to turn 18.
This means they can begin to access the money that was put aside for them by the Labour government.
The Labour government invested £250 in a fund for every child born from September 1 2002, until the scheme was closed by the Conservatives on January 1 2011.
The parents were given vouchers by the government in order to invest in their future.
If the parents failed to do so, HMRC set up the accounts for them.
What is a Child Trust Fund?
Child Trust Funds were a government initiative for children born between September 1 2002, and January 1, 2011.
Parents and guardians received vouchers to deposit into an account on behalf of their child.
These were worth between £50 and £1,000, depending on the parents income, or when they were born.
Once the account was open, parents could also add to it – adding to its value now.
This could be done at a variety of banks and investment companies, and was tax free.
HMRC has said around 55,000 trust funds will mature each month.
How much will the Child Trust Funds be worth?
This depends on how much was initially put into the account for the government.
It is also possible the parents may have added to the account.
It also depends on whether it was saved in a cash account or a stocks and shares account.
For example, if a child received two payments of £250 and it was invested in the FTSE 100 index, they would now have a pot of £1,198, according to investment company AJ Bell.
The company also explained to The Sun, that if the same money had been saved in cash earning 2% a year, it would be worth £668 today.
Alternatively, if someone got two contributions of £500, and it was invested in the FTSE 100, it would be worth £2,397 today.
How to access the Child Trust Funds
To track down a lost Child Trust Fund account, you can check here.
You need a Government Gateway user ID and password to access it.
If you don’t have one, you can create one using the online form.
If you’re a parent you will need your child’s Unique Reference Number, which you’ll find on the annual Child Trust Fund statement, or their National Insurance Number.
If you want to access your own trust fund, all you need is your National Insurance Number.