New Chancellor John Healey blamed for Child Trust Fund scheme that left £1.6billion unclaimed while managers made millions
A newspaper investigation has revived criticism of the Child Trust Fund scheme, the government savings initiative for children first rolled out under the last Labour administration, pointing to new Chancellor John Healey's role in its oversight. The report highlights that around £1.6 billion sitting in these accounts remains unclaimed by the young adults who are now entitled to it, while the companies managing the funds are reported to have earned substantial fees and profits from running the scheme.
The Child Trust Fund gave vouchers to children born in a set period to be invested in long-term savings accounts, which mature and become accessible once the holder turns 18. Many beneficiaries appear unaware the accounts exist or have not come forward to claim the money, leaving large sums untouched, while providers continued to draw management charges. The criticism comes amid wider scrutiny of Healey following his elevation to Chancellor, with questions raised over his historical ministerial responsibility for the scheme's administration.
In short
- John Healey criticised over Child Trust Fund scheme from his time in government.
- Roughly £1.6 billion in child savings accounts remains unclaimed.
- Fund managers reportedly profited heavily while money went unclaimed.
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The strongest fair case each way — we don't pick a winner.
The case for
Advocates for holding Healey and his ministerial predecessors to account argue that public money entrusted to a government-backed savings scheme carries a duty of stewardship, and that £1.6 billion sitting unclaimed while private providers continued drawing management fees represents a governance failure that deserved earlier, more vigorous ministerial intervention. They contend that officials responsible for overseeing the scheme should have pushed harder for proactive tracing of beneficiaries and tighter controls on charges, and that scrutiny of Healey's historical role is a legitimate part of holding office-holders accountable for outcomes on their watch, particularly now he holds the country's most senior economic office.
The case against
Those more sympathetic to Healey and the scheme's administrators would argue that the Child Trust Fund was a well-intentioned, cross-party-inherited policy whose core design challenge, tracing young adults who move house, change names or simply aren't aware of childhood accounts, is a practical difficulty rather than evidence of neglect or wrongdoing. They would point out that unclaimed funds are not lost, remain the rightful property of the account holders, continue to accrue value, and that HMRC and providers have run reunification campaigns, and would caution against retrospectively blaming a single minister for a systemic administrative issue spanning multiple governments and departments over nearly two decades.
Explained simply
The Child Trust Fund was a government savings scheme introduced by the Labour government in the early 2000s. It provided vouchers to children born within a specified period, which parents could invest in long-term savings accounts designed to grow until the child turned 18.
Now that those children have reached adulthood, the accounts have matured and the money has become accessible to them. However, many young adults appear unaware these accounts exist or have not claimed the funds, leaving around £1.6 billion sitting unclaimed whilst the financial companies managing the accounts have continued to charge management fees.
The issue has been highlighted again in light of John Healey's recent appointment as Chancellor. When he held ministerial positions under the previous Labour government, Healey had responsibility for overseeing the scheme, raising questions about its administration during his tenure.
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