The UK government plans to let suitable people apply directly to providers for Child Trust Fund savings held by young adults who lack mental capacity, aiming to ease access for families who currently face a court process in England and Wales.
The proposed route would allow someone such as a parent or carer to approach the account provider. The Court of Protection would remain an option. The government has yet to decide who may apply, what documents providers should require or what safeguards will apply. Scotland and Northern Ireland have separate processes for low-value assets, including Child Trust Funds.
The government estimates that 63,000 to 126,000 young adults have not been able to access their savings easily because they lack capacity to manage their finances. Economic Secretary to the Treasury Lucy Rigby said the accounts hold an average of £2,600. The long-term, tax-free accounts began in 2005, and about 6.3 million were opened. An account matures and is automatically taken over by its holder on the 18th birthday.
The government plans to amend the Financial Services and Markets Bill and establish the scheme through secondary legislation, subject to parliamentary approval. A provision added by the House of Lords on Sept. 9 was included in the version printed for the House of Commons on Sept. 15. It directs the Financial Conduct Authority (FCA) to make rules on access to Child Trust Funds and Junior ISAs, and caps aggregate payments under an agreement at £5,000 in any 12-month period. The government has not explained how its planned amendment would affect that provision.
Contact Chief Executive Anna Bird welcomed the proposal. The government said campaigners, disability charities and financial providers would help develop the scheme. Contact credited a six-year campaign led by parent carer Andrew Turner with helping press for change. The bill’s second reading is scheduled for Nov. 10; no start date for the proposed access route has been announced.
