Key facts
- The FCA is reviewing child trust fund providers to ensure fair treatment of savers.
- Around 760,000 unclaimed child trust fund accounts are valued at over £1.5 billion.
- The review will assess firms' efforts to trace customers and the fairness of charges.
- The FCA advises using the free HMRC service to locate lost child trust funds.
- The review's findings are expected next year, with potential regulatory action.
The Financial Conduct Authority (FCA) is scrutinizing child trust fund providers to ensure they are actively assisting savers in locating and accessing their money. The review comes as an estimated 760,000 accounts, collectively worth over £1.5 billion, remain unclaimed. The scheme, which ran from September 2002 to January 2011, aimed to encourage saving among children, with many accounts still maturing until 2029.
The FCA will investigate whether banks, insurers, and fund managers are sufficiently proactive in tracing customers who have lost touch with their accounts. The review will also examine potential barriers for vulnerable individuals seeking to access their funds and assess the fairness of charges in light of the 2023 consumer duty, which mandates financial firms to deliver good customer outcomes.
Chris Knight, the FCA’s director of insurance, emphasized the importance of these funds for young people's futures and stated the review's focus on customer access, fair value, and support for vulnerable consumers. The regulator also issued a warning about the high fees charged by some claims management companies for tracing funds, advising individuals to use the free service provided by HMRC. The FCA plans to gather detailed information from providers, particularly those with significant market share or indicators of consumer harm, with findings and potential actions expected next year.