Government Plans to Rectify Child Trust Fund Inequities

Younger adults who lack the mental capacity to make informed financial decisions will soon find it easier to access their savings, alleviating a long-standing injustice that has posed unnecessary challenges for families.

In response to years of advocacy and the legal struggles faced by families, the Government is set to introduce new legislation aimed at simplifying access to Child Trust Funds. This initiative will replace the complex and often expensive Court of Protection process.

The forthcoming reforms are anticipated to enable parents and carers to approach Child Trust Fund providers directly, thereby resolving years of distress for an estimated 63,000 to 126,000 young adults. Established in 2005, Child Trust Funds were designed to provide children with a financial advantage as they transition into adulthood; however, the existing framework failed to accommodate 18-year-olds lacking the mental capacity to manage their finances, leaving them without a clear path to access their savings.

Collaboration for a Fairer Process

Collaboration among campaigners, disability charities, and the financial services sector will be essential in shaping the new process, ensuring it safeguards young people while dismantling barriers that have hindered families for far too long.

Justice Minister Jake Richards stated, “Young people who lack the mental capacity to make financial decisions should be able to access their savings as easily as possible – particularly when this money was set aside by loved ones to assist them in their journey into adulthood. This is an injustice that we are finally rectifying, and as advocates have maintained for years, the time for change is long overdue. This legislation will ensure this group of young adults no longer encounters obstacles in accessing funds that are rightfully theirs.”

Economic Secretary to the Treasury, Rt Hon Lucy Rigby KC MP, added, “The changes we are implementing will facilitate access for tens of thousands more young people to connect with their Child Trust Funds, which are valued at an average of £2,600 each. I am delighted that we are putting an end to this long-standing injustice and am grateful to all who have collaborated with us to bring this about.”

Designing an Accessible Scheme

The Government is committed to collaborating with various stakeholders to define the new process, including determining who can access the funds, the evidence required, and the necessary safeguards to protect young individuals lacking mental capacity while avoiding excessive bureaucracy.

It is important to note that this new scheme will not replace the invaluable functions of the Court of Protection, which will continue to serve as an alternative route to safeguard the financial interests of adults unable to make financial decisions.

Amendments to the Financial Services and Markets Bill will be proposed to facilitate the new scheme, with further details to be outlined in secondary legislation following Parliamentary approval.

Support from Advocacy Groups

Anna Bird, CEO of Contact, expressed enthusiasm for the government’s commitment to legislate for a more straightforward method for young disabled individuals to access their Child Trust Fund savings. “For too long, tens of thousands of young disabled people and their families have navigated a complicated and costly process to access funds that rightfully belong to them. This marks a significant breakthrough following six years of persistent campaigning led by parent carer Andrew Turner, whom Contact has proudly supported. We commend Andrew and all the parent carers who have worked tirelessly to effect this change. We appreciate Minister Richards’ willingness to listen and act, and we look forward to collaborating with families, the government, and financial providers to establish a straightforward scheme with appropriate safeguards.”

Andrew Turner, a parent campaigner, remarked, “This bold initiative from the government is incredibly positive news for tens of thousands of young people who have been excluded from accessing their Child Trust Fund savings. By dismantling the barriers that have made it difficult for families to invest in child savings schemes for disabled children, we are also paving the way for a stronger financial future for these young individuals. A simpler process for accessing these savings will unlock millions of pounds in benefits and alleviate the administrative burden on parents supporting a disabled child. I am deeply grateful to Minister Richards and the government for their commitment to addressing this long-standing issue and eagerly anticipate working together to deliver a much-needed solution.”