Government rejects Martin Lewis' call to do more to help 80,000 teens with special educational needs unlock Child Trust Fund cash
The Minister for Children, Families and Wellbeing, Claire Coutinho MP, has rejected Martin Lewis' call to do more to help 80,000 teens with special educational needs or disabilities unlock their Child Trust Fund money. The MoneySavingExpert.com founder wrote to the Minister about the problem but she's written back... and effectively said no.
Between 2002 and 2011, most children born in the UK were given £100s in a tax-free savings Child Trust Fund (CTF) by the state, which parents could then add more on top. The money was set to be accessible when the child turned 18 – giving everyone some cash to start their adult life.
Many with CTFs have now hit that age, but for 80,000 children in England and Wales with special educational needs or disabilities, their cash can't be accessed without a nightmare, costly, often unaffordable process for their parents. In many cases, accessing the fund can cost nearly £1,000, which can often outweigh the amount saved. Read our Child Trust Funds guide for more information on how they work.
Martin originally asked Ms Coutinho about this problem when he presented ITV's Good Morning Britain on 28 June. At the time, the Minister said she wasn't aware of the issue, but would look into it.
On 10 July, Martin then sent the Minister a letter, including a briefing about the problem and highlighting two key solutions the Government could implement to better support parents. You can read Martin's letter in full below.
However, Ms Coutinho's now responded and said she can't help. You can also read the Government's response in full below.
Martin: The Government has so far 'failed to meaningfully act' to help young people locked out of their savings
Below is a copy of Martin's full letter to the minister sent on 10 July. For further info, you can also see Martin's Child Trust Funds blog post.
Read the Government's full response to Martin's Child Trust Fund calls
Below is the full response to Martin's letter from the Minister for Children, Families and Wellbeing.
18 July 2023
Dear Martin,
Thank you for your letter highlighting the issue around access to matured Child Trust Funds (CTFs) for young people with disabilities, which you also raised with me on Good Morning Britian [sic], and I promised to look into.
As Minister for Children, Families and Wellbeing, I am committed to supporting children and young people with special educational needs and disabilities (SEND). That’s why in March this year, we published the SEND and Alternative Provision Improvement Plan setting out our ambitious plans to ensure every child and young person with SEND gets the support they need to live happy, healthy and productive adult lives.
Although the Child Trust Fund scheme is administered by HM Revenue and Customs, I have taken the opportunity to understand this issue fully since you raised this with me.
It is a long-held principle that an adult must have proper legal authority to access or deal with property belonging to anyone over the age of 18. This principle has existed long before CTFs and is even more important when the individual is a vulnerable person.
Whilst not necessary for every child with SEND, where appropriate, the Mental Capacity Act (2005) plays a critical role in giving parents and carers the legal authority to make financial decisions where an individual lacks mental capacity, either through a Lasting Power of Attorney or the Court of Protection.
The Government has put several steps in place to address the issues that you raised in your letter, to prevent delays and expenses that families may face when trying to access matured CTFs.
Families do not have to wait until their child reaches 18 before making an application to the Court of Protection. We strongly encourage families to make an application to the Court of Protection before the dependant’s 18th birthday if they are likely to lack capacity to manage their own matured CTF when they turn 18.
If a property and affairs application is made to the Court of Protection before the dependent’s 18th birthday, the funds held on the CTF will not count as capital and they will not have to pay the court application fee. An early application to the court will also ensure that they receive the court order well before the CTF matures.
You do not need a legal representative when applying to the Court of Protection, although some individuals may choose to use a lawyer to help them fill out the forms.
Additionally, the Government has waived application fees for parents and carers in the majority of cases solely involving access to matured CTFs.
It is the Government’s intention that no parents or carers will have to pay legal fees to access these funds. More information on the criteria can be found here: Child Trust Fund court fees waived for parents (www.gov.uk/government/news/child-trust-fund-court-fees-waived-for-parents).
Evidence obtained through the recent Ministry of Justice consultation of accessing limited funds belonging to an individual who lacks mental capacity, including matured CTFs, highlighted some of the barriers to the current system, including those that you have raised in your letter.
However, this evidence also suggested that potential solutions, such as a small payments scheme, would only serve as a superficial fix, and that efforts would be better focussed on improving the current process.
To do this, the Court of Protection has introduced an online application process which has reduced waiting times for court orders from 24 weeks to 8 weeks. Further improvements to the system and related forms is ongoing.
In order to raise awareness and help parents and carers better understand what they need to do under the Mental Capacity Act to manage the finances of their child, the Ministry of Justice launched a toolkit in June and will be working with financial providers of CTFs on how they can promote to [sic] their account holders.
Thank you again for taking the time to raise this important issue with me. My colleagues at the Ministry of Justice, Department for Work and Pensions and HMRC will continue to look into this matter so that we can ensure that young adults can access their matured CTF.
Yours sincerely,
Claire Coutinho MP
Share this guide?
26 November 2024
Clever ways to calculate your finances
