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Child Trust Fund Providers - The Time to Act is Now!


The first Child Trust Funds have matured in September 2020, but 1.7 million young people who have a Child Trust Fund are marked as ‘gone away’* by the fund provider.

Earlier in September, The Investing and Savings Alliance (TISA) hosted an online briefing to discuss the challenges faced by the industry in reuniting these ‘gone away’ young people with their money.


The Tracing Group’s Managing Director, Danielle Higgins, sat on the panel alongside industry experts including TISA, The Money and Pensions Services and leading UK financial institutions such as Aviva, OneFamily and Nationwide. All of whom are eager to develop an ethical and viable solution to this prevalent issue.

* This term is used to describe customers who are no longer at the address held on file for them.

What are Child Trust Funds?

Child Trust Funds are long-term children’s saving accounts set up by the Government. They were designed to ensure children arrived at adulthood with a savings account and understood the importance of saving. Child Trust Funds were available to all children born in the UK whose parents were awarded Child Benefit between 1 September 2002 and 2 January 2011.

All money earned on the Child Trust Fund is tax-free, and when the account holder turns 18, the mature Child Trust Fund can either be cashed in or transferred to an adult ISA. Child Trust Funds were set up with £250, and have been enhanced over the years. This could mean there is around £1000 in most mature accounts.

What are the challenges?

There are many challenges faced by the industry in connecting this money with its rightful owner.


If the holder of a Child Trust Fund does not advise the provider of their intentions for the money at or before the point of maturity, the money will be held in a ‘protected account’ until contact is made.

Some providers have consolidated or transferred ownership of their funds to other providers which presents challenges with record keeping. Data quality issues can creep in when data is transferred from one organisation to another. Transferring and consolidating funds with a new provider makes it harder for young people to trace their fund if they do not recognise the new provider’s name. Many organisations are providing web-based information to assist young people in tracing the new holder of their fund.

House moves and high rates of modern family breakdowns all create barriers to finding these funds. If a young person no longer lives with the parent/guardian who set up their Child Trust Fund then account details may be lost. Research suggests that 4-5% of the UK population will move to a new county or city each year, so there is a high probability that holders of maturing Child Trust Funds will have moved at least once in their lifetime. We also know that when organising the paperwork associated with a house move, individuals will update contact details on immediate and important service providers like current accounts and utilities first, before slowly working through longer term savings provisions such as pensions and investments, provided they have in fact remembered to add this to the list of organisations to update.

Complex processes for updating contact details which, for example, require identity documents, also increase the chances of young people losing touch with their money. The teenagers of 2020 are online and used to instant results, so providers which invest in a seamless online user interface are more likely to reap rewards and achieve successful reunification.

Many parents/guardians, and therefore their teenage children, were not engaged in the process when Child Trust Funds were launched, so there is less chance of individuals proactively seeking their fund. A re-engagement campaign is underway by the Share Foundation to try and raise awareness of the existence of these funds.

How are these challenges overcome?

Financial education is vital for young people who may need guidance and advice on how to access their fund and subsequently how to invest their windfall to safeguard their future. Embedding financial education into the school curriculum and explicitly decoding savings principles through education will be an important part of the strategy to reach young people. Financial institutions need to look at how to engage with “generation Z” young people through streamlined online solutions, effective social media campaigns and there is also potential to “gamefy” financial education through an app or online game. KickStart Money Group and TISA are looking at setting up a charity providing a centralised focus around financial education for young people. The Money and Pension Service also has a commitment to providing guidance and access to young people to allow them to make effective financial decisions across their life time, with a legal responsibility to providing financial wellbeing support through the 10 year UK Strategy for Financial Wellbeing.


Tracing data for young people under 18 is not readily available, so the most cost-effective way of tracking down the rightful owners of Child Trust Funds will involve engagement with the parents/guardians, before the child turns 18. The parent/guardian is more likely to have electoral roll information, address history and credit data, making it easier and subsequently less costly to perform a trace. If the tracing process is left until the Child Trust Fund holder turns 18, the research will likely still need to utilise the parent’s/guardian’s information, but the engagement will be with the 18 year old only, presenting further barriers to success.

What will be the outcomes?

There are many benefits to providers in successfully connecting with these customers. If the process is started early enough, a two-fold engagement with the parents/guardians and the young person could take place, potentially offering two lucrative customer retention opportunities to the provider. The cost of acquiring a new customer far exceeds the cost of retaining an existing one, or even two. Reuniting a young person with their Child Trust Fund presents marketing opportunities to engage these young customers on a savings journey, encouraging them to re-invest even part of their savings for the future. Successfully reuniting young people with their maturing Child Trust Fund will develop precious brand loyalty to the provider who brings news of the unexpected windfall.

Providers must be ready to celebrate their successes and tell the story of the great efforts they have made to trace their customers.


For further information on The Tracing Group’s tracing, cleansing and data screening services please contact 01603 937800 or visit our website: www.thetracinggroup.co.uk.

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