Nearly a million young adults are missing out on an estimated £1,900 each in financial support, MPs have said.
A new report by the Public Accounts Committee (PAC) into Child Trust Funds (CTFs) estimates that there is about £1.7bn sitting unclaimed in accounts.
CTFs are tax-free savings accounts set up for all eligible children in the UK who were born between 1 September 2002 and 2 January 2011.
The PAC report found that due to a failure in long-term planning by HMRC, an estimated 42% of 18-to-20-year-olds have not claimed the savings.
The committee said it is likely that many account-holders may not know about their savings or have lost track of them, and HMRC should be doing more to find those who are eligible to access the funds.
Dame Meg Hillier MP, chair of the committee, said: ‘The aims behind Child Trust Funds are laudable - for young people to come into a pot of money on reaching 18, with the promotion of financial literacy and good savings habits. But many young people are unaware that they have money waiting to be claimed. Schemes like these need careful planning so that they are not forgotten at the point when they mature.
‘Our inquiry heard a world of difference can be made to care leavers in particular, with Funds acting as a jump-start into adult life. In an ongoing cost of living crisis, our young people need every bit of support we can give them. HMRC still has time to make sure that CTFs are given the chance to be the boost to young people’s futures which they were designed to be.’
