Up to 126,000 young Britons who faced barriers to withdrawing their Child Trust Funds will now be able to access their savings, which average £2,600. Following years of campaigning, new legislation will be introduced to allow simpler access to Child Trust Funds for young people lacking the mental capacity to make financial decisions, replacing the complex and often costly Court of Protection process.
New legislation to simplify access
The reforms are expected to allow parents and carers to go directly to Child Trust Fund providers to access savings – worth £2,600 on average – aiming to solve 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.
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," Richards added.
Campaigners welcome the change
Campaigners, disability charities, and the financial services sector will help shape the new process, 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 Court of Protection, which remains an alternative route to protect vulnerable adults.
Anna Bird, CEO of Contact, said they "warmly welcome" the change. "For too long, tens of thousands of young disabled people and their families have faced a complicated and costly process to access money that rightfully belongs to them," they said. "This marks a significant breakthrough after six years of determined campaigning led by parent carer Andrew Turner, whom Contact has proudly supported."
Lead campaigner Andrew Turner said: "This bold move from the government is extremely positive news for tens of thousands of young people who have been locked out of their Child Trust Fund savings."
"By removing the barriers that make it hard for people to invest in child savings schemes for disabled children, you also create the opportunity to build a stronger financial foundation for their future. A simpler process for accessing these savings will release millions of pounds of benefit and help reduce the administrative burden on parents supporting a disabled child," Turner said.
"I am extremely grateful to Minister Richards and the government for their commitment to solving this long-running issue and look forward to working with them to deliver a much-needed solution," he added.
Next steps for the scheme
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. Economic Secretary to the Treasury, Rt Hon Lucy Rigby KC MP, said: "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."
