The Financial Conduct Authority has initiated a regulatory review of child trust fund providers to assess their efforts in locating account holders and ensuring fair treatment of savers. The review comes as approximately 760,000 accounts, valued at an average of £2,000 each and totaling more than £1.5bn, remain unclaimed by their rightful owners.
The child trust fund scheme was introduced as a government initiative to encourage savings for young people, with approximately 6.3 million children born between 1 September 2002 and 2 January 2011 receiving accounts. Families received initial contributions of at least £250, with options to add additional funds. The program ended in 2011, though existing accounts continue to accrue value until 2029 as beneficiaries reach adulthood.
The FCA plans to examine all 55 providers’ practices regarding customer tracing efforts and identify obstacles faced by parents and guardians of vulnerable individuals seeking to access funds. The review will also assess whether charges and fees comply with fair value requirements established under consumer duty rules introduced in 2023. The regulator indicated it would focus particular attention on firms with substantial market shares or evidence of potential consumer harm, with findings expected to be released within the coming year.
Authorities cautioned consumers against using claims management companies that charge fees—sometimes as high as £400 or through monthly subscriptions—to locate accounts. The FCA emphasized that account tracing can be completed at no cost through HMRC, providing an alternative to paid services. Regulators indicated they may take enforcement action against providers if the review identifies violations or harmful practices.
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