Maturing Child Trust Funds Present Opportunities for Engagement
The first Child Trust Funds will mature in September 2020, but 1.7 million young people who have a Child Trust Fund are marked as ‘gone away’ by the fund provider. The Investing and Savings Alliance (TISA) are hosting a panel event “Maturing Child Trust Funds Online Briefing”on 23 September 2020 to discuss the challenges faced by the industry in reuniting young people with their money.
The Tracing Group’s Managing Director, Danielle Higgins, will sit on the panel alongside other industry experts all eager to develop an ethical and viable solution to this issue.
Child Trust Funds are long-term tax-free children’s saving accounts set up by the Government. They were designed to make sure children arrived at adulthood with a savings account and understood why it is important to save. 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 a Junior ISA. If the holder of a Child Trust Fund does not advise the provider of their intentions for the money at maturity, the money will be held in a ‘protected account’ until contact is made.
There are many challenges faced by the industry in connecting this cash with its rightful owner. Some providers have consolidated or transferred ownership of their funds to other providers which presents challenges with record keeping, and also makes it harder for young people to trace their fund if they do not recognise the new provider’s name. House moves, family breakdowns and complex processes for updating contact details all increase the chances of young people losing touch with their money. A re-engagement campaign is underway by the Share Foundation to try and raise awareness of the existence of these funds.
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 proactive engagement with the parents or legal guardians, before the child turns 18. There are many benefits to providers in successfully connecting with these customers which presents marketing opportunities to engage these young customers on a savings journey, and develop precious brand loyalty to the provider who brings news of the unexpected windfall.
More information on the key findings from the panel event will be published soon.
To find out more about The Tracing Group’s tracing services, or to get in touch with us, please visit our website: www.thetracinggroup.co.uk.