Young people in northern England are disproportionately affected by unclaimed savings.
The Share Foundation has uncovered a significant geographical disparity in forgotten Child Trust Fund accounts.
The charity’s figures show the North East records the worst rate nationally, with nearly a quarter of all Child Trust Funds remaining unclaimed at 23.1 per cent.
This compares starkly with southern regions, where the South East England and South West England record rates of 19.6 per cent and 19.7 per cent respectively.
The Government-backed savings scheme, which provided accounts for children born between September 2002 and January 2011, was designed to give young adults a financial boost as they entered adulthood.
However, almost two decades later, large numbers of account holders remain unaware the funds exist in their name.
Across the North of England, around 216,000 young adults are owed a combined £285million in these forgotten accounts.
Of this total, 94,000 belong to individuals from low-income households.
The HM Revenue and Customs (HMRC) also automatically created a substantial number of these accounts after parents failed to open them themselves.
Large numbers of account holders remain unaware the funds exist in their name
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The North East has the highest proportion of these HMRC-allocated accounts in the country, with 32.6 per cent set up in this way.
By comparison, the South East records 22.5 per cent while the South West records 22.7 per cent.
The unclaimed HMRC-allocated accounts in the North East alone are worth £48million.
Among the 94,000 unclaimed accounts belonging to young adults from low-income households across northern England, around 76 per cent were automatically created by HMRC.
Northern children are disproportionately affected by the issue
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These accounts represent approximately £191million in savings that the owners may not realise belongs to them.
The Share Foundation’s analysis also highlights a wealth gap among account holders.
Young adults from the most affluent 15 per cent of families hold Child Trust Fund accounts averaging around £5,000, with fewer than five per cent going unclaimed.
By contrast, those from the most disadvantaged 15 per cent of households have average balances of about £2,900 while facing unclaimed rates of roughly 42 per cent.
Similar patterns are also visible in Scotland, where around 70,000 young adults remain unaware of their Child Trust Fund savings.
Nearly half of these Scottish accounts belong to individuals from low-income families, including 24,000 HMRC-allocated accounts worth £64million that have yet to be accessed.
Nationally, an estimated 539,000 adult-owned Child Trust Fund accounts were automatically created by HMRC and remain unclaimed.
Of these, around 275,000 accounts worth £743million belong to young people from disadvantaged backgrounds.
Gavin Oldham, chair of trustees at The Share Foundation, said: “Young people in the North, particularly those from low-income families, are being left behind twice over – first when their families did not engage with the scheme, whether due to lack of awareness or financial constraints, and now when they do not even know this money exists.”
He added: “At a time when young people are struggling with the cost of living, these missing funds could cover a rental deposit, pay towards education, clear debts, or provide a crucial buffer as they start their adult lives.”
The charity has already reunited more than 100,000 young people with their forgotten savings through its free online search tool.
In total, more than £250million has been recovered for account holders through the initiative.