Trust Funds and Mental Capacity

Created: 5/4/2023

Between 2002 and 2011 millions of children born under the then Labour government were given between £250.00 - £500.00 to invest in a Child Trust Fund. This incentivised parents to then add savings to the fund producing a savings pot for their child when they reached 18.

Parents have saved for their children over those years and for many young people accessing the fund will not be problematic, however, for those young people who lack the mental capacity to manage their finances and who rely on support to do so, many parents are faced with the challenge of applying to the Court of Protection to be appointed as a deputy to access those funds for their loved one.

It is reported that 200,000 young people may lack capacity to manage their finances and therefore cannot access the money in their Child Trust Fund.

The application to become a deputy via the Courts is a lengthy and costly one, with applications taking six months or more at a cost of £371.00, this is a substantial amount of funds that some families will just not have.

Parents report the process is a complex one with form filling and jargonised processes to navigate, meaning the process is also a stressful one and this is only the beginning of an ongoing commitment.

Once a parent or carer becomes a deputy in this way, they are then held accountable for all financial decisions and spending and required to evidence this to the Courts who monitor those deputies who take on the role. For a parent or family member, that level of scrutiny and questions of trustworthiness can be a step too far.

The Ministry of Justice figures show the only 15 accounts were accessed via the Court of Protection in 2021. Siblings in households will have a financial disparity with those who can access their funds and those who cannot, again people with disabilities are facing challenges that their peers are not, leaving them financially disadvantaged unless they have a parent or carer able to become their deputy.

In November 2021 the government announced a consultation process to look at allowing access to Child Trust Funds of Junior ISA’s where the amount was up to £2,500 without needing to access the Court of Protection Deputyship route however this was rejected with a plan to simplify the Court process and this is yet to be established.

In summary, thousands of families and young people will be unable to access their savings without accessing the Court process or until the Government are able to offer a creative solution in line with Mental Capacity Act principals and with necessary safeguarding and monitoring in place.