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Consultation Aims to Improve Child Trust Fund Access for Children with Learning Difficulties

Updated: Nov 8, 2023

Following a recent House of Lords debate, the Government has announced it will be entering into a consultation designed to streamline the process by which children with learning difficulties can access their mature Child Trust Fund. Child Trust Funds were given to babies born between 2002 and 2011, and could contain £1000 or more at maturity. The current terms and conditions mean that young adults with learning disabilities, or who otherwise lack the capacity to manage their financial affairs, are not able to withdraw their money from these accounts.  Furthermore, since only young adults can access the funds, nobody else can withdraw the money on their behalf.  This creates a real problem for families who may have diligently saved into their child’s Trust Fund or ISA and are now unable to access and use the money for their child.

happy family  claimed their funds from child trust fund

Easing Access to Child Trust Funds for Young Adults with Learning Difficulties

“We are pleased to see the Government is taking this issue seriously, and taking steps to improve the process to enable these vulnerable young adults to access their money,” said Danielle Higgins, Managing Director of The Tracing Group, which co-founded the CTF Register.

Under the current rules, the only way in which the Child Trust Fund of a person with a learning difficulty can be accessed is through an application by their parents to the Court of Protection for a Deputyship Order.  This is a time consuming and complicated legal process (6 months plus) with ongoing administrative responsibilities. 

The Ministry of Justice have stipulated that if a Deputyship application is made for the sole purpose of withdrawing funds from a Child Trust Fund or Junior ISA they will waive the Court fee (currently £365), but a capacity report by a medical practitioner is still required at a cost of £300-500. Current data suggests that only 4 families have successfully navigated this process out of an estimated 10 000 young people with a learning difficulty whose CTF has matured in the last 12 months.

In the short term, 8 member organisations of the Association of Financial Mutuals who have a book of Child Trust Funds have agreed to a Fair Access Protocol. This protocol allows for balances of up to £5,000 to be released, without the need for their parent or guardian to adopt the usual Court of Protection process, and with proportionate safeguarding of the interests of the CTF holder. The protocol is a process that is similar to the fair access protocol used by The Department for Education to enable vulnerable people to obtain a school place and allows the release of funds against documentation that the parents or carers may already have.

Martin Shaw, Chief Executive of AFM said:

“As a sector, mutuals are keen to support the vulnerable and those least able to access financial services. All AFM members with a CTF book have agreed to simplify the maturity process, reduce costs to parents and carers, and ensure young people receive the money due to them without delay. We are doing this ahead of the government consultation and planned changes to the law because it is very much the mutual way of doing business”.

Finding Solutions for Lost Child Trust Fund Access

Danielle Higgins of The Tracing Group added:

"We wholeheartedly support the introduction of the Fair Access Protocol, and will be keenly following the progress of the government's consultation process to implement a more permanent solution for children with learning difficulties to easily access their Child Trust Fund."

For further information about tracing your Child Trust Fund, check out the CTF Register.

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