An estimated 55,000 young people are set for a bumper pay day next month as the first of the UK’s “baby bonds” mature in September.
Those turning 18 will be able to access the cash for the first time, with an estimated £9bn still locked up in the scheme.
Around 6.3 million child trust funds (CTF) have been set-up since their inception in 2002, according to HMRC.
Starting from September, these will come good up to January 2029.
While around 4.5 million of these funds were opened by parents or guardians, 1.8 million were set up by HMRC where parents had failed to do so. This means kids could be in line for a surprise payout.
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In 2015, the government started allowing anyone with a CTF to transfer it to a Junior ISA, so the number of accounts may have decreased slightly.
At the time of setting them up, the lowest possible contribution was less than £100, but there are still accounts worth tens of thousands of pounds.
The likely windfall for most will be several hundred pounds or a couple of thousand if they are lucky.
Payouts could vary hugely depending on how much cash was injected by both the government and whoever set it up. They could also vary depending on dates of birth and family income.
The majority of the funds are based on investments in shares, while others act the same as cash savings accounts.
According to Laura Suter, personal finance analyst at investment platform AJ Bell, if an account had received two payments of £250, one at birth and one on the child’s seventh birthday, and the money was invested in the FTSE 100 index, the pot would now be worth around £1,200 in August this year.
If the same amount had been put into a cash account with an interest rate of 2% a year, the money would be worth £668 today, Suter told the Guardian.