Recommendation 10

In many cases, the providers are likely to be making profits off savings mostly composed of government money. From the start of the scheme until 2010, just over one- third of Child Trust Funds (37%) received additional payments into them other than from the government. More recently, in the 2020–21 tax year, 4.6 million Child Trust Fund accounts out of the 5.5 million accounts on which HMRC had data received no additional money. One of our witnesses, who had previous experience working at a Child Trust Fund provider, told us that providers are likely to be incurring very few costs from managing a typical Child Trust Fund.14 Since April 2011, providers do not have to produce annual statements for accounts which have not received any payments (except for any from government) in the previous 12 months. However, providers are still required to provide statements in the year following the children’s 10th, 15th and 17th birthdays.15