Locked out: an update on Child Trust Funds

8th April 2021

TAGS child trust fund

  • As many as 200,000 disabled children could be locked out of their savings held in Child Trust Funds. This is because they don’t have the mental capacity to manage their money when they turn 18.

    Their parents face the prospect of having to pay hundreds of pounds in Court of Protection fees to access the money on behalf of their child. A parent-led campaign for less costly and easier access to Child Trust Funds is now starting to have an impact.

    At the beginning of December 2020, the Government announced that most parents who apply to the Court of Protection to become a financial deputy just to access a Child Trust Fund will not have to pay the court fee (currently £365). Those who have already paid can request a refund.

    Parents can already get help with court fees if:

    • They apply before their child’s 18th birthday.
    • Their child is over 18 and has savings of less than £3,000 and receives certain benefits or has a low income.

    Now parents of children over 18 can ask for help “due to exceptional circumstances” if the Child Trust Fund is their only asset, regardless of the amount in the fund. Applications for fees to be waived or refunded will be considered on a case-by-case basis.

    In a separate move, The Investing and Saving Alliance (TISA) has proposed a solution which would give parents of disabled children who have up to £5,000 in their accounts and no other savings access to the money without having to apply to the Court of Protection. Most Child Trust Fund providers have agreed to these proposals, but so far the government has refused to back them.

    Some Child Trust Fund providers, including BMO and OneFamily, have already introduced alternative routes for parents to access their child’s savings. They will consider applications on a case-by-case basis.

    What should you do if your child has a Child Trust Fund and won’t be able to manage their money when they turn 18?

    • Write to your Child Trust Fund provider to see if they will release the funds.
    • Decide if you need to apply to the Court of Protection to become a financial deputy.
    • Go to this government website and apply for help with Court of Protection fees.

    Not sure if your child has a Child Trust Fund?

    Child Trust Funds were set up by the government for children born between 1 September 2002 and 2 January 2011. Even if you did not make any contributions yourself, your child’s fund could now be worth up to £1,500. This is because the government made several payments into these accounts. To locate a lost Child Trust Fund, click here.