Guardian Business says the Financial Conduct Authority is examining whether child trust fund providers are doing enough to reconnect people with accounts that have gone unclaimed. The regulator has warned that claims management companies have charged customers £400 to locate missing funds, while some have imposed monthly payments for a tracing service intended for one use. People searching for a child trust fund can use HMRC’s tracing service without paying a fee.
The FCA estimates that roughly 760,000 accounts remain unclaimed, with an average value of £2,000 each. Together, those accounts represent more than £1.5bn, according to the regulator. The review will require all 55 providers to describe how they are trying to find customers who no longer have contact with their accounts. It will also examine difficulties affecting parents and guardians of vulnerable people who may have problems accessing the money.
The accounts were created for about 6.3 million children born from 1 September 2002 to 2 January 2011 under a government saving initiative. Families were given at least £250 and encouraged to add more, although some parents allowed the government to select a provider. Although the scheme ended in 2011, the accounts can keep maturing until 2029, when their holders reach 18.
The FCA will assess whether fees and charges offer fair value following the introduction of the consumer duty in 2023. The regulator said it would seek more information from providers with large market shares or signs that customers might be suffering harm. It may take action against providers if its findings warrant it and plans to report back the following year. The FCA has also encouraged parents and young adults to use the free service to check whether they have a forgotten fund. The warning comes as the regulator looks at whether banks, insurers and fund managers are making sufficient efforts to trace account holders.