| TL;DR: A Child Trust Fund matures automatically at 18 and the money becomes accessible, but if left untouched it can sit in a low-interest matured account. Transferring it into an adult ISA using the official process keeps the same tax-free treatment and does not count against your annual ISA allowance. Last reviewed July 2026 |
| INVESTING : CHILD TRUST FUND AT 18 |
A Child Trust Fund automatically matures on your 18th birthday, at which point the money becomes yours to access. If no action is taken, most providers move the funds into a default matured CTF account, which is not always competitive. Transferring the balance into an adult Stocks and Shares or Cash ISA, using the same official transfer process as any other ISA, preserves the tax-free wrapper without using any of your annual ISA allowance.
KEY FACTS
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Why so many people forget they have one
Child Trust Funds were opened automatically or by parents for children born in a specific window in the early 2000s, often seeded with a government contribution and sometimes without the child ever being told the account existed. Because the account was opened years before the child could meaningfully engage with it, and because family circumstances such as changed addresses or divorced parents can mean paperwork was never passed on, it is genuinely common for someone turning 18 to have no idea a CTF exists in their name.
If you were born in the qualifying window and are unsure whether a CTF was ever opened for you, HMRC provides an online tracing tool that can identify which provider holds the account using your National Insurance number, which is usually the quickest way to locate an account you have lost track of.
What actually happens on your 18th birthday
A Child Trust Fund matures automatically at 18, with no action required to trigger this. From that point, the money legally belongs to the account holder rather than the parent or guardian who may have managed it previously, and it becomes accessible to withdraw, transfer or continue investing as the new adult account holder chooses.
Providers are required to write to the account holder around this time to explain the options available, though these letters do not always reach the right address if contact details were never updated over the years since the account was opened, which is a further reason CTFs often go unclaimed or unmanaged well past the maturity date.
Why leaving it untouched is usually the wrong choice
If no instruction is given at maturity, most providers automatically move the funds into a default matured CTF account, which is designed to preserve the tax-free status of the money but is not necessarily a competitive product in terms of interest paid or investment growth potential. This default account exists as a safety net, not as the best available option.
Because the matured CTF continues to sit with the original provider by default, many account holders simply never revisit the decision, leaving a meaningful sum of money, sometimes several thousand pounds once early government top-ups and years of growth are included, earning less than it could in a more competitively priced or better-performing account elsewhere.
Transferring into an adult ISA without losing the tax-free wrapper
The tax-free growth built up inside a Child Trust Fund can be preserved by transferring the matured balance into an adult Cash ISA or Stocks and Shares ISA, using the standard ISA transfer process rather than withdrawing the money and paying it in as a fresh deposit. This transfer does not count against your annual ISA allowance, regardless of the amount transferred, since it is treated as moving money between tax wrappers rather than a new subscription.
| Option at 18 | What happens | Tax-free status |
| Leave in default matured CTF account | Money stays with original provider, often at a low rate | Preserved, but not necessarily competitive |
| Transfer to an adult Cash ISA | Money moves via official ISA transfer, no allowance used | Preserved and can access better rates |
| Transfer to an adult Stocks and Shares ISA | Money moves via official transfer, invested per your choice | Preserved, market risk applies |
| Withdraw the money entirely | Cash paid out, no longer in a tax wrapper | Lost once withdrawn |
Choosing where to transfer it to
Whether a Cash ISA or a Stocks and Shares ISA is the more sensible destination depends on what the money is likely to be used for and how soon. Money earmarked for a near-term goal, such as a deposit within the next year or two, generally suits a Cash ISA, where the value will not fluctuate with market movements. Money intended to be left invested for many years, such as a long-term savings goal, may benefit from the potential for greater long-term growth a Stocks and Shares ISA can offer, alongside the corresponding risk of value falling as well as rising.
For an 18-year-old with no immediate plans for the money and a long time horizon before it might realistically be needed, a Stocks and Shares ISA is often considered, though this is a personal decision that depends on individual circumstances, risk tolerance and financial goals, rather than a single correct answer for everyone in this position.
What to do if you cannot find your CTF provider
If the maturity letter never arrived, or you are unsure which provider holds your Child Trust Fund, HMRC's tracing tool is the most direct starting point, since it can identify the provider using basic personal details even where the account holder has no prior paperwork or memory of the account being opened.
Once the provider is identified, contacting them directly to confirm the current balance and discuss transfer options is the next step, and most providers have a specific process for handling exactly this situation, since it is a common one they deal with regularly as more Child Trust Fund holders reach 18 each year.
What to do if the balance is larger than expected
Some Child Trust Funds, particularly Stocks and Shares CTFs invested over many years, can mature with a balance considerably larger than the modest government top-up that originally opened them, simply due to years of investment growth. If the matured balance is large enough to be a meaningful sum relative to your annual ISA allowance, spreading a transfer across more than one tax year, where the 90-day rules or provider processes allow it, or seeking guidance on how best to use the money, is worth considering rather than making a rushed decision purely because the account has just become accessible.
Why acting sooner rather than later is worth it
Every year the matured balance sits in a low-interest default account rather than a more competitive ISA is a year of foregone growth or interest that cannot be recovered afterward, which is a straightforward but easy to overlook reason to deal with a matured Child Trust Fund promptly rather than treating it as something to sort out eventually once other priorities are settled.
| Note: Child Trust Fund maturity processes and default account terms vary by provider and can change. Confirm the specific options and any account charges directly with the provider holding your CTF. |
| RELATED GUIDES |
| Disclaimer: Kael Tripton Ltd is an independent editorial publisher, ICO-registered (ZC135439). This guide is general information, not financial, tax, legal or insurance advice, and carries no commission or referral arrangement. Your circumstances may differ; consider speaking to a regulated adviser before acting. Figures and thresholds change; verify current numbers with the primary sources listed below. |
Frequently asked questions
Do I need to do anything when my Child Trust Fund matures?
No action is required for it to mature, but taking action, such as transferring it into a competitive adult ISA, is usually more beneficial than leaving it in a default matured account.
Will transferring my CTF use up my ISA allowance?
No. An ISA transfer, including from a matured CTF, does not count against your annual ISA allowance regardless of the amount transferred.
How do I find a Child Trust Fund I have lost track of?
HMRC provides an online tracing tool that can identify the provider holding your account using your National Insurance number.
Should I choose a Cash ISA or a Stocks and Shares ISA for my matured CTF?
It depends on when you might need the money. Cash ISAs suit shorter-term needs; Stocks and Shares ISAs suit longer time horizons where you can accept investment risk.
| SOURCES |
