Young people lacking the mental capacity to make financial decisions will finally have easier access to their Child Trust Funds.
- Easier access to savings for thousands of young adults lacking the mental capacity to make financial decisions
- Families spared complex and lengthy court process under new reforms
- Part of Government’s plan to create a fairer Britain for everyone
Young people lacking the mental capacity to make financial decisions will finally have easier access to their savings, ending a long-standing injustice that has created unnecessary barriers for families.
Following years of campaigning and legal difficulties faced by families, new legislation will be introduced by the Government to allow simpler access to Child Trust Funds, replacing the complex and often costly Court of Protection process.
The reforms are expected to allow parents and carers to go directly to Child Trust Fund providers to access savings, solving years of unnecessary anguish for an estimated 63,000 to 126,000 young adults.
Child Trust Funds were introduced in 2005 to provide children a financial boost as they start adulthood, but the scheme made no provision for 18-year-olds who lacked the mental capacity to manage their finances without a straightforward way to access their savings.
Campaigners, disability charities, and the financial services sector will help shape the new process, protecting young people while pulling down barriers that have frustrated families for years.
Justice Minister, Jake Richards said:
Young people who lack the mental capacity to make financial decisions should be able to access their savings as easily as possible – especially when this money was put aside by loved ones to help them take their first steps into adulthood.
This is simply an injustice that we’re finally putting right and as campaigners have argued for years, change is long overdue. This legislation will ensure this group of young adults no longer face difficulty from accessing money that is rightfully theirs.
Economic Secretary to the Treasury, Rt Hon Lucy Rigby KC MP, said:
The changes that we’re introducing will help tens of thousands more young people to connect with their Child Trust Funds – worth on average £2,600 each.
I’m so pleased that we will finally ending this long-standing injustice and I’m grateful to everyone who has worked with us to make this happen.
The Government will work with various stakeholders to explore how the new process is designed, including who can access funds, what evidence is required and what proportionate safeguards are necessary to protect young people who lack mental capacity without creating unnecessary and costly red tape.
The scheme won’t replace the important work of the Court of Protection, which will remain available as an alternative route to protect the financial interests of adults lacking the mental capacity to make financial decisions.
The Government will bring forward an amendment to the Financial Services and Markets Bill to enable the new scheme, with the details to be set out in secondary legislation following Parliamentary approval.
Cat Smith, MP for Lancaster and Wyre said:
One of the first actions I took following Andy Burnham’s appointment as Prime Minister was to lobby for better access to Child Trust Funds for vulnerable children, following contact from families and organisations – and I’m absolutely delighted the Government have listened and acted.
Labour’s Child Trust Funds were set up in 2005, seeded with up to £500 to invest in every child with a financial boost at the start of adulthood until they were abolished by the Conservatives in 2010. Now these accounts are maturing with £2,200 average savings, it’s right that Labour’s Child Trust Funds are easier to access and reconnect with over 750,000 young people.
