The government is urging hundreds of thousands of young people to cash in their Child Trust Fund.
HM Revenue and Customs (HMRC) say that almost 430,000 18 to 21-year-olds have an unclaimed fund, with the average worth £2,000.
Child Trust Funds are long-term, tax-free savings accounts that the government set up for every child born between 1 September 2002 and 2 January 2011.
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Upon opening the accounts, the government contributed an initial deposit of at least £250, with many parents regularly adding to it.
And those who have the funds are able to withdraw the money when they hit 18.
A whopping 5.3 million Child Trust Fund accounts are currently open, and families can continue to pay in up to £9,000 a year tax-free into a Child Trust Fund until the account matures.
The money stays in the account until the child withdraws or reinvests it into another account.
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More than half-a-million have been claimed or transferred into an ISA since the oldest children on the scheme turned 18 in September 2020.
However, there are still plenty that are yet to be unclaimed and, during UK Savings Week, HMRC is urging those who are eligible to collect their cash.
Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive, said: “Many 18-21 year olds are starting out in first jobs or apprenticeships, starting university or moving into their first home and their Child Trust Fund is a pot of money with their name on.
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"I would encourage young people to use the online tool to track it down or, for parents of teenagers, to speak to them to ensure they’re aware of their Child Trust Fund.
"It could make a real difference to their future plans.”
Sharon Davies, CEO of Young Enterprise also said: “We would encourage all young people to investigate if they have money which is unclaimed in a Child Trust Fund and to use it wisely.
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"A disproportionate amount of the money is unclaimed by young people from disadvantaged backgrounds who are the very people who would benefit most from these funds.
"The investment could be placed into an adult ISA or put towards driving lessons, education or starting a business.
“The money in a Child Trust Fund has the potential to be life changing and the lack of knowledge about them shows the importance of financial education and financial planning from a young age”.
If eligible, you can head here to find out where the Child Trust Fund account is held.
Claire Reid