Helen led a debate in Westminster Hall this week to seek Government action on ‘lost’ Child Trust Fund accounts worth £1.5 billion.
Child Trust Funds were launched in 2005 as part of Gordon Brown’s plan to make sure each child had a good start in life. The scheme was designed to provide a financial cushion for young people as they enter adult life, building skills and confidence in money management.
Most children born between 1st September 2002 and 2nd January 2011 received Government contributions to this savings programme, with some children receiving up to £1000 from the Labour Government.
There are currently over 6 million Child Trust Funds, but a million of these aren’t properly linked up to their beneficiary and do not have the correct contact information. There are over 8000 children in Bishop Auckland constituency with a fund, but over 3000 of these will not know that they have this money waiting for them when they turn 18.
During Wednesday’s debate, Helen argued that “the Government have failed to run the scheme properly,” describing these lost accounts as a “blunder.”
Helen said “The Government seem to be hiding the funds from those for whom they were intended.” While only 6% of accounts held by children in the wealthiest families have been lost, there is no contact information for 40% of children from families who were on tax credits when the fund was set up.
It was this group of less-well-off children that the scheme was designed to benefit. Helen said, “in essence, the Government have overturned the whole purpose of the scheme.”
Helen described this situation as a “scandalous and secret maladministration of public money on a vast scale. Unless the 1 million children and young people are tracked down, and the £1.5bn is given to those for whom it was set aside, that money will go back to the Treasury.
“That would be a terrible waste – not just of the money, but of the life chances of the young people for whom it was intended.”
Helen called upon Treasury Ministers to actively work to reunite young people with their money.
Currently, the only information issued by the Government is included in the small print of the letter sent to 16-year-olds when they receive their National Insurance Number. It is vague, and easily missed if young people aren’t already aware of the scheme.
The Economic Secretary to the Treasury, John Glen MP, responded during the debate. He referred to the issue of lost accounts as a “lack of engagement” from account holders. The Minister would not commit to further measures suggested by MPs, including a positive public awareness campaign.
The debate closed after Mr Glen offered MPs a meeting with the Parliamentary Under-Secretary of State for Children and Families for further discussions.
To trace a missing Child Trust Fund, young people or their carers should complete an online form. This can be accessed at: https://www.gov.uk/child-trust-funds