Discover the hidden world of Child Trust Funds! A senior MP advocates for automatic payouts, potentially unlocking millions for unaware young adults. Delve into the realm of gilts—UK government bonds—understanding their reliability and investment perks. Learn about bridging gaps in National Insurance to maximize retirement income and hear a couple's success story on boosting their weekly earnings after tuning in. It's a treasure trove of financial insights!
Initiatives to automatically pay out unclaimed Child Trust Funds could significantly help nearly half a million young adults gain access to their money.
Completing National Insurance record gaps before the April deadline can substantially increase state pension income for individuals nearing retirement.
Deep dives
Accessing Child Trust Funds
Many young adults in the UK may be unaware of the existence of Child Trust Funds, which were established for every baby born between September 2002 and January 2011. These funds were initiated with government contributions, offering parents the opportunity to add to them over the years. An alarming number of these funds, amounting to around £927 million, remain unclaimed, primarily because individuals do not know they exist. Initiatives by organizations like the Share Foundation aim to automatically pay out unclaimed funds to those who have not accessed them by a certain age, potentially making a significant difference to their financial situations.
Importance of Filling National Insurance Gaps
Individuals nearing retirement have a unique opportunity to increase their state pension by filling gaps in their National Insurance records before the window narrows in April. The costs associated with purchasing these gaps can yield high returns, as paying around £825 may translate into about £3,330 per year in retirement income if the gaps are filled. Notably, many people do not realize their gaps stem from factors like unemployment, traveling abroad, or caregiving responsibilities. Utilizing digital services to check National Insurance records has streamlined the process, making it easier for individuals to ensure they qualify for a full pension.
Understanding Gilt Investments
Gilts, which are government bonds, provide a method for individuals to earn tax-free returns on their investments through fixed-rate interest promised by the government. As market conditions dictate prices, investing in gilts could yield capital gains, especially if interest rates decline. Investors have the flexibility to purchase gilts easily through online platforms, enabling them to diversify their investment portfolios. Understanding how rising yields influence borrowing costs and mortgages can also help individuals realize the broader economic implications of their investment choices.
A senior MP has backed calls to start automatically paying out hundreds of millions of pounds to young adults if they haven’t claimed government-backed child trusts funds by the time they turn 21. Sir Geoffrey Clifton-Brown, who is also chair of parliament’s Public Accounts Committee, says the move would help nearly half a million people born between 2002 and 2011 access one billion pounds of their own money that they don’t even know about. The government says the idea would be complex and costly.
There has been a lot of talk on the news about gilts and the bond market. We're joined by Russ Mould, the investment director of AJ Bell, to explain what a gilt is and whether you can buy one?
There's less than three months left to boost your state pension by to filling old gaps in your National Insurance record. At the moment people who have not yet reached pension age and those already on the new state pension can fill gaps in their record back as far as 2006. From this April that window will be shut. What should you do, if you think you've got gaps to fill?
And, the couple who boosted their income by more than a hundred pounds a week after listening to Money Box. Find out how they did it.
Presenter: Paul Lewis
Reporter: Dan Whitworth
Researchers: Eimear Devlin and Jo Krasner
Editor: Jess Quayle
(First broadcast 12pm Saturday 18th January 2025)
Get the Snipd podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share & Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode