POUND NOTES
■ Parents and grandparents are shortchanging children by leaving tax-free junior Isas and child trust funds in poor value cash accounts or losing track of them altogether.
The next generation could be out of pocket by more than £3billion as a result, money youngsters desperately need to pay for their education, top up earnings or get on the property ladder.
Experts are urging parents to track down their junior Isa (JISA) and child trust fund (CTF) paperwork, to make sure money is invested effectively.
Children could collectively have £1.2bn more if their JISAs had been invested in shares instead of cash, wealth manager Quilter calculates.
Two-thirds of JISA money is held in cash despite record low interest rates, while stock markets have boomed since the tax-free savings wrapper was launched in 2011.
Quilter’s figures suggest cash JISAs paid an average of 2% a year since, while a global spread of stocks and shares would have returned 11%.
Separate research shows that another £2.2bn held in CTFs is likely to go astray, with one in four accounts “lost or dormant”.
CTFs are the predecessor of the JISA, and around 6.3 million were set up for children born between September 1, 2002 and January 2, 2011.
Originally, each child received a free voucher worth £250 (£500 for lower income families), with a top up at seven. Some 1.8m children whose parents didn’t actively set up a CTF still have access to one through gov.uk
The first wave of CTFs matured in September 2020, 525,000 in total, yet almost six in 10 lay unclaimed by May 31.