For many families of young people with special educational needs and disabilities (SEND), a Child Trust Fund (CTF) can provide valuable financial support for future needs. However, parents are often surprised to discover that once their child turns 18, they can no longer automatically access the account, even if they have managed every aspect of their child’s care, support and finances throughout their life.
Enable Law’s Legal Director, Rukhsana Koser, regularly advises families navigating the transition to adulthood and highlights the importance of understanding the legal position before a young person reaches 18.
What is a Child Trust Fund?
Child Trust Funds were introduced for children born between September 2002 and January 2011. These tax-free savings accounts were designed to provide young people with a financial asset when they reach adulthood.
For young people with SEND, the funds may help pay for:
- Specialist equipment
- Adapted technology
- Therapies
- Education and training opportunities
- Supported holidays
- Future care and independence needs
Many accounts contain hundreds or even thousands of pounds, making them an important source of support at a key stage in a young person’s life.
Why can’t parents simply access the money?
The key issue is that the money legally belongs to the young person.
At the age of 18, an individual becomes a legal adult and is presumed to have the capacity to make their own financial decisions unless there is evidence to indicate otherwise. As a result, parents do not automatically retain authority over their child’s finances after their eighteenth birthday.
This can come as a surprise to families who have previously managed benefits, bank accounts or other aspects of financial decision-making on their child’s behalf.
What happens if a young person lacks mental capacity?
Mental capacity refers to a person’s ability to:
- Understand information relevant to a decision
- Retain that information long enough to make a decision
- Weigh up the available options
- Communicate their decision
Importantly, capacity is both decision-specific and time-specific. A diagnosis or disability alone does not mean a person lacks capacity. Each situation must be assessed individually.
Where a young person lacks the capacity to manage their Child Trust Fund, additional steps may be required before the account can be accessed.
First steps for families
If a son or daughter is unable to manage their Child Trust Fund independently, there are several practical steps families can take.
- 1. Locate the account
If the account provider is unknown, HMRC’s Child Trust Fund tracing service can help identify where the funds are held.
- 2. Contact the provider
Many providers have procedures in place for customers who may be vulnerable or who lack mental capacity. It is worth asking whether the provider operates:
- A vulnerable customer process; or
- A simplified process for customers who lack mental capacity.
- 3. Gather supporting evidence
Providers may request evidence before discussing or releasing funds, including:
- Medical evidence
- A mental capacity assessment
- Proof of identity
- Evidence of the relationship between the parent and account holder
Preparing this information early can help minimise delays.
Is a Court of Protection application always necessary?
Not always.
Some Child Trust Fund providers may release funds through their own internal procedures, particularly where account balances are relatively modest.
However, where ongoing financial management is required, or where the young person has wider assets, savings or investments, an application to the Court of Protection for a Property and Financial Affairs Deputyship may be necessary.
Obtaining specialist legal advice can help families determine the most appropriate route based on their individual circumstances.
Why a DWP Appointeeship may not be enough
One of the most common misconceptions is that a Department for Work and Pensions (DWP) Appointeeship provides authority over all financial matters.
In reality, a DWP Appointeeship is generally limited to managing benefits and does not automatically grant authority to deal with:
- Child Trust Funds
- ISAs
- Bank accounts
- Investments
- Property
As a result, additional legal authority may be required before funds can be accessed or managed.
- The importance of planning ahead
For families approaching this transition, early preparation can make a significant difference.
Practical steps include:
- Locating the Child Trust Fund
- Gathering account details and documentation
- Discussing capacity with relevant professionals
- Obtaining supporting evidence where appropriate
- Considering whether a Deputyship application may be required
Taking action before a young person’s eighteenth birthday can often help avoid unnecessary stress, delays and uncertainty later on.
Parliamentary developments: Potential changes on the horizon
Since this issue was discussed at Enable Law’s Moving On event earlier this year, where a parent raised concerns about accessing Child Trust Funds for a young person who lacked mental capacity, the issue has begun to attract national attention.
A new Child Savings Accounts (Mental Capacity and Disability) Bill has been introduced in Parliament. If passed, the Bill could make it easier for families to access Child Trust Funds and Junior ISAs on behalf of young adults who lack mental capacity, while maintaining appropriate safeguards to protect vulnerable individuals.
Although the law has not yet changed, the introduction of the Bill represents a positive development and reflects the challenges that many parent carers have experienced when trying to access savings that were intended to support their child’s future.
Families should not rely on the proposed legislation becoming law and are encouraged to seek advice based on the current legal framework.
How can we help
At Enable Law, we are committed to supporting families to secure the education and support their children are entitled to throughout this evolving SEND landscape.
Our specialised education team has decades of experience helping families secure and maintain the right education provision for their child/young person. To speak with Rukhsana Koser or a member of our education team and have an initial free discussion about your concerns and how we can help call us on 0800 044 8488 or fill in our contact form.
