The UK government announced on Tuesday 3 November a change that families of disabled children have waited years for. Young adults who lack the mental capacity to make financial decisions are to get simpler access to the savings held in their Child Trust Fund (CTF) accounts.
According to the Ministry of Justice and HM Treasury, parents and carers will be able to approach the account provider directly, instead of going through the complex and often costly Court of Protection process.
Who is affected
A Child Trust Fund is a long-term, tax-free savings account for children born between 1 September 2002 and 2 January 2011 who lived in the UK and were eligible for Child Benefit. The state paid in a starting voucher and families could top it up. The money becomes available at 18.
The problem is that the scheme made no provision for 18-year-olds unable to manage money themselves. Today, as GOV.UK explains, a parent, close friend or relative must apply to the Court of Protection for a financial deputyship order. The government estimates the issue affects between 63,000 and 126,000 young adults. The average CTF is worth around £2,600.
What exactly will change
Economic Secretary to the Treasury Lucy Rigby has announced an amendment to the Financial Services and Markets Bill. It will allow the Ministry of Justice to make regulations setting out the new process. The details – who can access the funds, what evidence is needed and what safeguards apply – will be developed with disability organisations and the financial services sector.
Importantly, the Court of Protection will remain available as an alternative route, especially for those who need stronger legal protection.
“This is simply an injustice that we’re finally putting right,” said Justice Minister Jake Richards. The charity Contact, which supports families with disabled children, called it a breakthrough after six years of campaigning by parent carers.
What it means for Polish families
Between 2004 and 2011 a great many children of Polish parents were born in the UK. Every child born in that period and eligible for Child Benefit could have received a CTF – often without their parents knowing, as they were still settling into a new country. Those children are now aged 15 to 24.
Our assessment: this is good news, but not yet the moment to act. The change needs the amendment and regulations to pass, and the government has not given a start date. A family that urgently needs the money for an adult child must still use the current Court of Protection route.
What you can do now:
- Check whether an account exists. If you do not know who holds the CTF, HMRC will tell you free of charge where it was opened. You do not need to pay a company to find it.
- Beware of intermediaries. Firms that charge commission to “recover” a CTF do what HMRC does for free.
- Gather documents. The child’s birth certificate, Child Benefit or National Insurance number and medical evidence on capacity will be useful in any process.
- Scotland and Northern Ireland. The Court of Protection covers England and Wales; Scotland and Northern Ireland have different procedures. The announcement does not specify how the new system will work there – watch for details.
When the details will come
According to the Evening Standard, the second reading of the Financial Services Bill is scheduled for next week. We will follow it through Parliament and explain the new process once the government publishes it.
Sources:
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