Amendment to the Financial Services Bill being debated to give parents of children with no capacity access to their Child Trust Funds
On Monday 12th April, an amendment to the Financial Services Bill is being debated in the House of Lords to allow payments to be made from a Child Trust Fund or Junior ISA to a recipient acting for a young person without capacity. This has been tabled by Lord Young of Cookham and Lord Blunkett.
Nearly 8,000 18 year olds with disabilities that make them reliant on their parents to manage their finances have been locked out of easily accessing their Child Trust Funds since the first accounts started maturing in September 2020. 1,000 more young adults fall into this position every month.
Currently, parents or guardians of 18 year olds with no capacity must go through the Court of Protection to access the funds. Despite the waiving of the court fees, this can be a lengthy process, still incur other costs, with delays made worse during lockdowns resulting from the pandemic.
TISA (The Investing and Saving Alliance) has been instrumental in designing the alternative solution for families impacted by the current rules. The process allows parents or guardians to access the funds via simple paperwork and declarations as well as appropriate evidence from practitioners that their child does not have the capacity to make the financial decisions or provide the instructions necessary to complete the maturity process.
Nigel Banfield, Technical Policy Manager, TISA said: “Parents and guardians of these young adults will be able to access the CTF savings by filling out a five page application form and getting a medical practitioner to fill out a one page document. This process cuts out a huge amount of time, unnecessary paperwork and complex legalities in comparison to the current Court of Protection route yet offers similar safeguards against adequate abuse.
“This issue needs to be resolved with urgency. Based on this alternative process, the amendment to the Mental Capacity Act will help around 160,000 families who will be affected by this issue when trying to access their child’s savings. We are extremely grateful to Lord Young and Lord Blunkett who have taken this to the House of Lords, to Lord Vaizey for his ongoing support, and to the CTF providers that have helped draft the amendment.”
Lord Young of Cookham said: “This amendment to the Financial Services Bill is essential in helping families access their children’s savings. Parents of children with no mental capacity do not need the added burden of court processes, unnecessary paperwork and solicitors’ fees just to access their child’s money. Often, the amount of money held in a Child Trust Fund, which OneFamily says averages around £2,100, can be indispensable to the account holder. My amendment is based on recommendations from the Law Commission and I hope the Government will respond sympathetically.”