Google Adwords 0808 278 1398 Bing Ads 0808 274 4482

Child Trust Funds | New Proposals to help access

The government is proposing a new simplified and streamlined process which will allow families in England and Wales to access small sums held in accounts belonging to a young person who lacks mental capacity (without a Lasting Power of Attorney or Court of Protection Order).

It is proposed that withdrawals and payments will be allowed from cash-based accounts such as a Child Trust Fund (CTF) or a Junior ISA up to £2,500 without the need to apply to the Court of Protection.  Currently, if a person lacks mental capacity and as a result cannot manage their finances, a family member or guardian must apply to the Court of Protection to manage these funds.  This is to protect vulnerable people from fraud or abuse. 

The process however, under the Mental Capacity Act 2005 can be disproportionately costly and lengthy, considering the small amounts of money usually involved.  Many families do not want the stress or cost of applying to the Court of Protection as well as the many months of waiting.  These new proposals should make it easier for those families that have saved for their children to be able to access the money that rightly belongs to their child for their needs.

The newly proposed scheme will amend the Act with supporting secondary legislation and safeguards against abuse, fraud and coercion.

Summary of proposals

• Payments would be permitted for a six-month period from one account

• Payments would be allowed up to a value of £2,500

• A single extension to the access period, of a further six months, would be permitted only if the value of £2,500 had not been reached

• The same account or other accounts belonging to the individual could not be accessed again by the same or a different applicant

• The scheme would be run by financial services firms such banks, building societies

• Applicants will be asked to consider whether a deputyship is necessary or appropriate for longer-term management of accounts and encouraged to apply to the Court of Protection where necessary

Consultation on the proposed scheme closed on the 12th January 2022.

If you have a loved one who lacks the mental capacity to manage their finances and you are unsure of what to do, please call Marie O’Malley for a free initial telephone consultation on 01926 354704.

Marie O'Malley | Senior Solicitor

Expert legal advice you can rely on,
get in touch today:

Please let us know you are not a robot