Families to get easier access to Child Trust Funds for young adults who lack mental capacity

Tens of thousands of young adults who have been unable to touch their Child Trust Fund savings are set to get easier access to their money, after the government announced plans to end what ministers called a long-standing injustice.

The change affects young people who lack the mental capacity to make financial decisions. Under the current rules, their families usually have to go through the Court of Protection, a process that can be complex, slow and costly, before the savings can be used.

Who is affected

Child Trust Funds were introduced in 2005 to give children a financial boost as they started adult life. But the scheme made no provision for 18-year-olds who could not manage their own finances, leaving no straightforward way for them to reach the money.

The government estimates that between 63,000 and 126,000 young adults are affected. Their funds are worth on average £2,600 each.

Under the reforms, parents and carers are expected to be able to go directly to the Child Trust Fund provider to access the savings, rather than applying to court.

"An injustice that we're finally putting right"

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."

He added: "This is simply an injustice that we're finally putting right and as campaigners have argued for years, change is long overdue."

Economic Secretary to the Treasury Lucy Rigby said the changes "will help tens of thousands more young people to connect with their Child Trust Funds".

Six years of campaigning

The announcement follows a long campaign by families. Anna Bird, chief executive of the disability charity Contact, said: "This marks a significant breakthrough after six years of determined campaigning led by parent carer Andrew Turner, whom Contact has proudly supported."

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."

He added that a simpler process "will release millions of pounds of benefit and help reduce the administrative burden on parents supporting a disabled child."

What happens next

The change is not in force yet. The government will bring forward an amendment to the Financial Services and Markets Bill to create the new scheme, with the detail set out in secondary legislation once Parliament has approved it.

Ministers say they will work with campaigners, disability charities and the financial services industry on how it works, including who can apply, what evidence is needed and what safeguards should protect young people. The Court of Protection will remain available as an alternative route.

For families in Birmingham caring for a young adult whose condition affects their capacity to manage money, it is worth watching for the details as they are published. Anyone unsure whether a Child Trust Fund was opened for their child can use the free government service on GOV.UK to find out where it is held.