‘It’s ridiculous’: the teens struggling to access NatWest child trust funds

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Teenagers with child trust funds at NatWest are waiting months to get hold of cash in matured accounts.

Those affected include Joshua Burdon, whose child trust fund (CTF) with £3,500 in it matured when he turned 18 more than a year ago.

He was planning to use the money to buy a car, but is still waiting for NatWest to transfer the cash, and says he ended up having to use his own money and borrow from a family member in order to finance the purchase.

Burdon is not alone in facing a struggle to get his CTF money out of the partially state-owned bank. NatWest is not short of cash – it made profits of £1.2bn in the first three months of this year – but it has been struggling to deal with a deluge of people wanting to redeem their CTF accounts.

Guardian Money has also been contacted by a woman who says her 18-year-old daughter has been waiting months for her money, and there are a number of recent complaints along similar lines on the Review Centre website and on the MoneySavingExpert forum, as well as on Twitter and Facebook.

CTFs – nicknamed “baby bonds” – are long-term tax-free accounts for children that were launched in 2005. More than 6.3m were opened before they were scrapped in 2011.

Every child born between 1 September 2002 and 2 January 2011 was awarded a cash “endowment” of, typically, £250. Some children received top-up payments from the government, and family and friends have been able to pay money in, too.

In autumn 2020 the first CTF children began turning 18, kicking off a multibillion-pound payout that will run all the way through until early 2029.

It is estimated that each month about 55,000 teenagers – about 1,800 a day – turn 18 and become entitled to a pot of cash with their name on it.

NatWest is one of the biggest CTF providers, with about 8,000 accounts maturing each month.

The official government guidance on what happens when a CTF account comes of age says that on a person’s 18th birthday, their CTF matures and they automatically take over the account, at which point they can either withdraw the money or reinvest it in an adult Isa.

Stressed young person with a laptop
Teenagers with child trust funds at NatWest are waiting months to get hold of their money. Photograph: Simonapilolla/Getty Images/iStockphoto

The complaints from Burdon and the others follow similar lines. They typically say they have sent NatWest the requested identity documents, in some cases several times, and tried contacting the bank via the phone line, online chat, post or email, but have not managed to get their cash.

Burdon’s CTF account was run by RBS Collective Investment Funds, part of NatWest, and was predominantly invested in shares.

The 19-year-old, who lives near Chelmsford, Essex, told Guardian Money he has been waiting months for the money to be paid into his Lloyds bank account. He says he has made several trips to the bank to get documents scanned in, posted off documents and tried calling the NatWest CTF phone line numerous times, spending hours on hold.

“I can’t get through to the phone lines, I can’t get through to any of the services … It’s becoming absolutely ridiculous now, and I need the money,” he says.

To make matters worse, the value of his fund appears to have fallen slightly – earlier correspondence gave a value of £3,598, while a more recent letter mentions a figure of £3,540.

The Review Centre website features a string of complaints from teenagers and parents who say they have tried to access their CTF cash but with no success. One, dated 27 April, says: “I have been trying to access my child trust fund with NatWest since October 2021 when I turned 18! It is now April 2022 and still no success…” Another, dated 25 April, says: “I turned 18 in October 2021. I still have not yet received my CTF money. I have submitted my documents four times now…”

On Facebook, there are a number of recent posts from unhappy people, including one who reported: “Portal not working… Phone line not being answered. Online chat unhelpful. How are our kids supposed to claim the money they’re entitled to? This process should be so simple.”

A NatWest branch
NatWest expects waiting times and query volumes over child trust funds to return to normal in the next few weeks. Photograph: Geoffrey Swaine/Rex/Shutterstock

NatWest says: “We are currently experiencing an extremely high volume of customers getting in touch to redeem child trust fund accounts and are sorry for the delays that some customers have experienced.

“The safety and security of our customers’ accounts is of paramount importance, and these accounts are particularly vulnerable to attempted fraudulent claims, which is why we have a detailed checking procedure when redeeming a child trust fund account.”

At the end of last year NatWest issued a reminder to customers whose accounts had matured but from whom it had not heard. This led to seven times the normal volume of inquiries, and the bank is dealing with these along with the regular maturity requests.

It says that some of the reasons customers may experience a delay include having an out-of-date address associated with their account, or not having ID documents properly certified.

The bank adds that it has “significantly increased the resource available to support customer queries on this” and expects waiting times and query volumes to return to normal in the next few weeks.

Commenting on Burdon’s case, NatWest apologised for the delay, adding: “The safety and security of Mr Burdon’s account is of paramount importance; as a result of this, we required some further documentation, which led to a delay in processing. We are pleased that Mr Burdon’s account has now been processed and he should receive his funds soon.”