Martin Lewis is always on hand to give money advice to those who need it. Last week, he revealed that thousands of older women could be entitled to £5,000! He has also predicted how much Brits will likely pay for their heating bill in the coming months.
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This week, on his show Money Show Live on ITV, he revealed that those born between 2002 and 2011 have a trust fund in their name that the government created. The money-saving expert, who also has a famous wife, has told parents to check their children’s trust funds.
He explained that even if the parents haven’t been putting money into the account, the state has, meaning that their children could have some savings as soon as they hit 18 years old. Here’s everything you need to know.
Your child has a state trust fund
Martin Lewis revealed on Tuesday, November 15 that any children born between January 1, 2002, and January 2, 2011, have a Child Trust Fund. He said on his show:
The state will have added money even if you didn't.
Up to a million children have these accounts unknowingly and they are sitting on around £1000.
He has urged parents to check out the Child Trust Fund using the gov.uk tool ’trace where the money is’. If you are over 18, you can check the account yourself.
He also added:
Even if you have adopted children or have your own if they are between 12 and 21 and you don't know about the Child Trust Fund go and check it out now.
Martin Lewis explained that the HMRC sent parents or guardians of children born between 2002 and 2011 a payment voucher of £250 or £500 if they were low-income. If the parents of guardians didn’t set up the account themselves within a year, the HMRC did it automatically.
What can you do with this state trust fund?
As reported by The Sun, once the child trust fund is set up, anyone can add to it. £9,000 can be added to the account per year. The year for the trust fund starts on the child’s birthday and ends the day before the child’s birthday.
Once the child turns 18, they have full control of the trust fund and no more money can be added to it. Child Trust Funds were replaced with Junior Individual Savings Accounts (ISAs) in November 2011.
There are several options for the money in your child trust fund. Many put the money into their current bank account, invest it or transfer it to an ISA. If you want to invest it, you can transfer it to a Lifetime ISA to help save for a deposit on your first home.
As per The Sun, if you have a Lifetime ISA, you can add £4,000 a year and the government will add a 25% bonus as long as the money is used to buy your first home.
The best part about these types of accounts is that you don’t pay tax on the interest you earn.
Read more:
⋙ Millions could be missing out on £2,100 if they were born between these two dates
⋙ Thousands of UK homes to be sent £270 by the end of the month, see if you’ll get the cash
Sources used:
The Sun: ‘CASH IN Millions of parents are only just realising they’re sitting on £1,000s in FREE cash thanks to Martin Lewis tip’
