Until now, if a young person doesn’t have the capacity to manage their own finances, their parent or guardian must apply to a Court of Protection to both manage and access the money on their behalf – and for those who have a certain amount in savings this comes at a cost, starting from £365.
But now families who need to manage accounts can ask for fees to be waived, while those who have already paid fees will be able to request a refund. The move comes after parents and campaigners, including The Times, raised concerns that the process of applying to access Child Trust Funds (CTFs) was both costly and stressful – and it’s a move that’s been welcomed by learning disability charity Mencap.
See below, as well as our Child Trust Funds guide, for more info on how these accounts work.
How do Child Trust Funds work?
Child Trust Funds (CTFs) are tax-free savings accounts for kids born between 1 September 2002 and 2 January 2011. At the time, families were given free cash vouchers from the Government of £250 or £500 to put into the account – and some were also given top-ups, meaning children could have been given £1,000 in total. On top of this, the child or family members can add to the account – the current cap is £9,000 a year.
Vitally, any money in the account belongs to the young person. They can manage the account from age 16, and then access the cash once they turn 18 – meaning the first teenagers were able to withdraw funds this September.
It’s worth pointing out that CTFs are no longer available to new account holders as they were replaced by Junior ISAs in 2011. But anyone who still holds a CTF is able to keep paying in and can switch to a new top rate at any time, just like with normal savings.