The Government has announced legislation that will give up to 126,000 young people lacking the mental capacity to make financial decisions easier access to their child trust fund (CTF) savings. The move will allow parents and carers to approach CTF providers directly to access the money, avoiding complex court processes.
What the changes mean
CTFs are long-term, tax-free savings accounts designed to give people a savings boost early in life. They were aimed at people born between September 1 2002 and January 2 2011, and savers can access the account when they turn 18.
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.”
He added: “This legislation will ensure this group of young adults no longer face difficulty from accessing money that is rightfully theirs.”
Support for families
Economic secretary to the Treasury, Lucy Rigby, 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.”
The Government said it will work with others 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. The Court of Protection will remain available as an alternative route to protect the financial interests of adults lacking the mental capacity to make financial decisions.
Next steps
In the Commons, Ms Rigby said: “The last Labour government introduced child trust funds with the intention that every child in this country could access a financial asset as they enter adulthood, and almost three million young people have already accessed their funds, currently containing an average of £2,600 each.”
She added: “I am going to be bringing forward an amendment to the Financial Services Bill. The second reading of which is next week, which will enable the Ministry of Justice to make regulations to put this in action.”
The reforms are expected to solve problems for an estimated 63,000 to 126,000 young adults, the Government said. Anna Bird, chief executive of Contact said: “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.”
