New Chancellor John Healey blamed for Child Trust Fund scheme that left £1.6billion unclaimed while managers made millions

By MARTIN BECKFORD, POLICY EDITOR Published: 21:00, 21 July 2026 | Updated: 21:03, 21 July 2026 The new Chancellor has been blamed for a 'baby bond' scheme that has left billions of pounds unclaimed while creating a bonanza for bankers. In his previous stint as a Treasury minister John Healey was involved in the creation of Child Trust Funds, which put £250 of taxpayers' money in a savings account for every newborn that they could only access when they turn 18. He defended the policy in the Commons when he served under Gordon Brown 20 years ago, and was credited with having 'guided' it 'into existence' by former Downing Street adviser Theo Bertram this week. But the Government has admitted that as much as £1.6billion remains unclaimed and just last month set up a new taskforce to find more than 750,000 young people who have on average £2,200 sitting in accounts they know nothing about. In addition a report by MPs found that the financial firms that managed the accounts were charging £100million a year in fees. Reform UK's pick for Chancellor Robert Jenrick said: 'This is the Healey record in miniature: a scheme trumpeted as a gift to every child in Britain that has ended up as a £100-million-a-year annuity for fund managers, while £1.6 billion of young people's own money gathers dust because the Government that created it couldn't be bothered to tell them it exists.' He went on: 'John Healey was the Treasury minister who designed this scheme, legislated for it, and launched it. 'Twenty years on, the children it was supposed to help — overwhelmingly from the poorest families — are the ones least likely ever to see a penny. John Healey addresses Treasury staff on Tuesday on his first full day as Chancellor 'He now controls the entire public purse. If he couldn't keep track of £250 per child, taxpayers are entitled to ask what hope there is for the other £1.3 trillion.'  He urged Mr Healey to reveal how much money HMRC has spent trying to find the young people whose Child Trust Funds remain untouched, and get 'every unclaimed pound back into their hands'. Overall the New Labour government spent £2bn on Child Trust Funds for 6million babies born between 2002 and 2011. The Public Accounts Committee inquiry in 2023 said the scheme had the 'laudable aims' of 'giving all young people a pot of money when they reach 18, promoting financial literacy and teaching good savings habits'. However it accused HMRC of 'failing to plan for the long term' and not doing enough to tell young people about their accounts or help track them down. The report warned it is likely that the bulk of unclaimed money 'belongs to young people from low-income backgrounds, those who need it most'. A HM Treasury spokesman said: ‘Child Trust Funds were designed to ensure millions of young people had a financial asset to support them as they entered adulthood, and around 6.3 million accounts were opened through the scheme. ‘Today, hundreds of thousands of young people have savings waiting for them, which is why the Government has stepped up efforts to help account holders find and access money that is rightfully theirs. ‘The new Child Trust Fund Taskforce is bringing together government and providers to reconnect young people with over £1.6 billion in unclaimed savings.’