Young People Urged To Claim Thousands From £9bn Pot Of Money Many Don't Know Exists
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Young people are being urged to claim what could potentially run into thousands of pounds each from a huge £9 billion pot of money that most don't even know exists.
So, ‘what is this huge pot of money and how can I get my hands on some of it?’ I hear you ask.
Well, back in 2005, the government set up what are known as Child Trust Funds, allowing parents to put money away for their kids, in an effort to encourage them to save as they got older.
The government pledged to put in the first £250 (low-income households were eligible for an additional £250 payment), with parents then taking over, adding to it as and when they could, with a maximum of £9,000 allowed to be deposited in any one year.
So, who has a Child Trust Fund? If you were born between September 1st 2002 and January 2nd 2011, your parent or guardian had a live child benefit claim for you, and you were living in the UK and not subject to immigration control, you should automatically have had one set up.
If you fit the criteria, you could actually have a fair bit of cash saved up, as the average fund is now worth around £2,100 - and with the current cost of living crisis seemingly worsening, people are being encouraged to get in touch to claim their cash.
If you or your family remember which company provided your trust fund, you can go to them directly to make your claim, but if you’re not sure you can search for them on the government's website here.
Teenagers aged 16 or over are able to take control of their fund, but it can only be accessed once a person reaches 18 and if you’re too young to withdraw the money, your family can still keep adding to it until you are old enough to either take it out or invest it in another savings account.
Speaking about the funds, the chief executive of HMRC Angela MacDonald said: "Teenagers could have a pot of money waiting for them worth thousands of pounds and not even realise it.
"We want to help you access your savings and the money you’re entitled to. To find out more search ‘Child Trust Fund’ on GOV.UK.”
For the older ones among us who sadly missed out on the opportunity for a Child Trust Fund, it could be worth setting up a Lifetime ISA…
Mr Money himself has advised all under 40s in the UK to take out a Lifetime ISA (LISA) to make the most of the yearly £1,000 government bonus.
While this may sound too good to be true, it genuinely isn’t. LISAs give first-time buyers a 25% bonus of up to £1,000 per year on their savings, after the account has been open for a year.All you need to get things started is to open a LISA - which you can do with just £1 - and start putting away as much as you can afford. But don’t worry even if you’re not a first-time buyer you can use it to save for your retirement instead.
Lewis wrote: "If you hope to buy your first home in the next 10 years, put £1 in a Lisa now.
"Lifetime ISAs give first-time buyers a 25% bonus (up to £1,000 a year) on their savings, but only after it's been open a year. So open one with £1 now, to start the clock, so it's usable if/when needed."
But before you go thinking you can just pile tens of thousands of pounds in (some chance) in order to get the 25% added, just hold up.
The scheme is only eligible up to a maximum of £4,000 a year meaning the maximum bonus you can get each year is £1000 - still, not to be sniffed at.
On top of that you will also be entitled to some interest on your savings which, because it's an ISA, will be tax-free, and with interest rates rising at the moment it could actually end up adding up to a nice little bonus!
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