Claim Your Child’s ‘Free Money’

For those of us who are blessed with children we could always do with a bit of financial help. If your child was born on or after the first of September 2002 the government has £250 to give you to invest on their behalf. The fund is to be held in trust for the child and cannot be accessed until they are 18 years of age. Many banks, building societies and other independent financial institutions have schemes where you can invest this money.

It seems, though, that many of us have not taken the government up on their offer of ‘free money’. Almost 50 per cent of the Child Trust Fund (CTF) vouchers launched a year ago have yet to be claimed, says a survey of the funds by a well known high street building society.

The £250 funds - or twice that for children of low income families - were opened by the government to ensure every child born after August 31st 2002 has a savings account for when they reach adulthood.

Parents were given 12 months to make their choice of investment in either a tax-free savings account, a stakeholder account partially invested in the stock market or a pure stock market fund.

Almost half of all parents have not claimed the vouchers however, meaning that the government will now make a decision on how to invest the funds on their behalf.

They will also have already missed out on a year’s savings account interest payments. A financial advisor says that parents will still be able to switch the funds to a saving account of their choice at a later date.

"All that's needed is a quick phone call to the Revenue. They will make some simple checks to confirm that the original voucher has not been used and arrange for a duplicate to be issued." She added.

If you would like to know more about the child trust fund why not ask AnswerBank Business and Finance.