Thousands of young people who lack the mental capacity to manage their finances could find it easier to access money held in their Child Trust Funds under new Government plans.
The proposed changes aim to remove a complicated legal hurdle that has left many disabled young adults and their families facing lengthy and costly court processes to release savings that belong to them.
Under the reforms, parents and carers will be able to approach Child Trust Fund providers directly to access the money on behalf of young people who lack the mental capacity to make financial decisions.
The Government said the changes could help between 63,000 and 126,000 young adults who have so far faced difficulties accessing their accounts.
Child Trust Funds are long-term, tax-free savings accounts introduced for children born between September 1, 2002 and January 2, 2011. The accounts were designed to give young people a financial asset when they reached adulthood, with money becoming accessible at the age of 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.
“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 Lucy Rigby said the reforms would help tens of thousands more young people access their accounts.
She 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.”
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How the Child Trust Fund changes will work
The Government said it would work with others to develop the new process, including deciding who will be able to access the money, what evidence will be needed and what safeguards should be put in place to protect young people who lack mental capacity.
Speaking 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.”
Campaigners welcome move to help families
Anna Bird, chief executive of Contact, said families had faced unnecessary difficulties when trying to access the money.
She 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.”
The Court of Protection will remain available as an alternative route for protecting the financial interests of adults who cannot make financial decisions for themselves.
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