The information provided in this article was accurate at the time of publishing and should be read in the context of the date it was published. Views in this article are those of the author alone and do not necessarily represent the view of Scottish Friendly.

Tracker fund

Many children could be missing out on a valuable start to their adult life if their parents or guardians don’t keep on top of the investment the then Labour government introduced in 2005 but which was closed to new investments in 2011 by the coalition government.

The first teenagers are set to benefit from the long-term tax-free savings scheme in less than five years.

The Child Trust Fund included an element of free Government contributions – £250 for each child and £500 for poorer children as well as a further tranche of money when children turned seven.

Parents could choose which provider to invest their child’s money with but many did not, leaving it to the government to automatically allocate the investment to a Child Trust Fund provider.

Particularly for those parents who did not really engage with their child’s Child Trust Fund, there is a danger that if they have moved house over the intervening years and did not inform the Child Trust Fund provider, their child could be missing out on a cash sum at a time of life they could really do with it.

The money, particularly if other family members have contributed to it, could help with further education costs, apprenticeships, buying a car or towards a house deposit.

Even for parents who did choose their child’s Child Trust Fund provider and who made additional payments into the fund to help their child in later life, there’s a danger that they may lose touch with the investment which runs up to the child’s 18th birthday.

HM Revenue and Customs provide an online facility through which enquiries about lost Child Trust Funds can be made.

In the meantime, make sure you let your Child Trust Fund provider know if you change address.   Use this opportunity to check your child’s Child Trust Fund too. If it’s invested in cash, you may wish to consider switching it to stocks and shares. Remember that the value of stocks and shares can go down as well as up and the child might not get back the original amount invested. Don’t forget, too, you can also switch the Child Trust Fund into a Junior ISA.

No advice has been provided by Scottish Friendly. If you are in any doubt as to whether a savings or investment plan is suitable for you, you should contact a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting Advisers may charge for providing such advice and should confirm any cost beforehand.