About 6.3 million children born between 1 September 2002 and 2 January 2011 had accounts opened for them under a government scheme designed to encourage saving. Photograph: Gareth Fuller/PA View image in fullscreen About 6.3 million children born between 1 September 2002 and 2 January 2011 had accounts opened for them under a government scheme designed to encourage saving. Photograph: Gareth Fuller/PA Child trust funds Child trust fund firms face review over efforts to find who owns £1.5bn worth of pots Exclusive: FCA pressures firms to do more to sort 760,000 accounts as watchdog urges families to use free tracking service
Prefer the Guardian on Google Child trust fund providers are being put under the spotlight to check they are treating savers fairly and doing all they can to reunite young people with lost accounts.
The Financial Conduct Authority (FCA) said about 760,000 accounts worth an average of £2,000 were yet to be claimed – more than £1.5bn in total – as it launched a review of the market.
The City regulator also urged parents and young adults to use a free checking service to see if they have a forgotten pot of money .
About 6.3 million children born between 1 September 2002 and 2 January 2011 had accounts opened for them under a government scheme designed to encourage saving.
Families received at least £250 and were encouraged to pay in more. While some parents did, others left it to the government to choose a provider.
The scheme closed in 2011, and existing accounts will continue to mature until 2029 as their owners turn 18.
The FCA said it would review whether banks, insurers and fund managers were being active enough in attempts to track down customers.
It will ask all 55 providers to explain the efforts they are making to trace customers who have lost touch with their accounts. It also plans to look at the barriers faced by parents and guardians of vulnerable people who may struggle to access their money.
View image in fullscreen Tony Blair pictured in 2002 at the launch of the Labour government’s child trust funds – labelled ‘baby bonds’ by the media. Photograph: Sean Dempsey/PA The review will also look at how firms are checking that charges and fees are fair after the introduction of the consumer duty in 2023, a rule stating that financial firms must deliver good outcomes for their customers.
Chris Knight, the FCA’s director of insurance, said: “Child trust funds can help set young people up for the future. But too many risk losing touch with money that is rightly theirs. Our review will look at how firms are helping customers access their funds, providing fair value, and supporting vulnerable consumers and their families.”
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The FCA warned about the cost of claims management companies offering to help people track down missing funds, but charging a fee to do so. It said it had seen cases where customers were charged £400 to locate an account, and others where firms charged a monthly subscription for a one-off tracing service.
Anyone looking for a fund can trace it for free through HMRC.
Knight said: “You don’t need to pay someone else to claim what’s rightfully yours – tracing and accessing your own child trust fund costs nothing, so think twice about handing over a chunk of your savings to a claims firm for a job you can do yourself.”…