Young adults with disabilities struggling to access savings, campaigners warn

Young disabled adults have been struggling to access their own money because of complex processes around child trust funds (CTFs), campaigners say.

One major CTF provider said it is “deeply unfair” that it must treat account holders lacking mental capacity differently to other 18-year-olds.

In February, the Government said it had decided against developing a scheme that could have allowed the parents of teenagers who lack mental capacity to access small payments from child trust funds without going through certain legal processes.

It said focusing on improvements to the application process, alongside raising awareness of the Mental Capacity Act, would address the root cause of the problem, so people know about the need to obtain legal authority for adults lacking capacity.

The Government is working with disability charities and the finance sector to raise awareness of the Mental Capacity Act, so more families find out about their rights and changes to them which come as children reach adulthood.

A Ministry of Justice spokesperson said: “We understand parents’ frustration, which is why we are simplifying the system and have waived court fees in these cases to ensure families should no longer incur significant costs to access funds.

“During our consultation, families and experts warned against removing vital safeguards which protect against fraud and abuse. That is why we are focused on digitising the court process so families can access the money they have saved quicker, while maintaining important protections.”

The Government has already started work to digitise and streamline application processes and a pilot of improvements indicated application waiting times had reduced from 24 weeks to eight.

CTFs are long-term, tax-free savings accounts for people born between September 1 2002 and January 2 2011, which they can access when they turn 18.

Many children received around £250 each from the state at the time their CTF was started, while those from low-income families or in local authority care received an additional £250.

Una Summerson, head of campaigns at disability charity Contact, said: “During this cost-of-living crisis, it is more important than ever that disabled young people can access their own money.

“When a disabled child reaches 18 it can be a particularly challenging time, as they transition to adult services and many see support change or drop away.

“Going through a complex court process is too big a mountain to climb for many families at such a stressful time.

“We are urging families with disabled teenagers to find out who their child trust fund provider is before their child turns 18. They can use the Government website to find out. Then speak to the provider or bank about your situation.”

The charity highlighted the case of Laura Williams, whose son Joel turns 18 in December.

She said: “Joel has the very rare genetic condition Malan Syndrome.

“Joel loves to ride his trike but he’s grown out of it, as he’s now 6ft 4in. He would dearly love a new one, and the cost is £6,000.

“That money in his savings account could have gone a long way to paying for something he really enjoys. But I don’t have the time or strength to go through the court of protection process.”

Teddy Nyahasha, chief executive of CTF provider OneFamily, said: “We campaigned to level the playing field for these teens, because it is deeply unfair that we should have to treat our account holders with mental incapacity differently to any other 18-year-old.

“We are extremely disappointed with the outcome of the Ministry of Justice’s small payments scheme consultation and hope that the court of protection improvements that have been announced will be swiftly implemented and will genuinely make it easier for families to access their children’s child trust funds.

“These young people absolutely deserve to be able to access their own savings when they want them, just like any other teenager.”

Philip Warford, managing director of Renaissance Legal, said: “Our long-held view is that all disabled children ought to be able to use savings that were put aside for their future.”

The National Audit Office recently raised concerns that accounts are at risk of becoming forgotten or lost track of by those holding them.

It previously said estimates indicate more than one-quarter of CTFs have remained untouched for a year or more after their owners turned 18.