In our inclusion-friendly times, would you be surprised to hear that thousands of teens have been facing going to court to access their own savings purely because they have a disability?
This problem came to my attention last year as we approached the impending maturity of the first of the child trust funds (CTF). These accounts were intended to encourage a savings habit and to level the playing field, by allowing every child the same opportunity to benefit from long term savings.
Except it seems equality currently doesn’t apply for the estimated 200,000 young people who will need extra assistance in withdrawing their own money over the next nine years. For these customers there’s a bit of a problem.
Families who already have a lot on their plate are being told by the Government that, under the Mental Capacity Act (MCA), they have to fill in 59 pages of complex forms, source files of medical documentation and make an application to the Court of Protection just to access their children’s savings. It can be a stressful and time-consuming process. To date, the Government has made a small concession in the waiving of the Court of Protection fee for the majority of cases, but this isn’t enough.
Just eleven families out of the 200,000 have managed to navigate the hurdles to reach their children’s money in the eleven months since September. That’s a tiny number and, as a provider, we’re worried that many more might have simply given up. Shouldn’t we be encouraging these parents to spend their precious time with their vulnerable child rather than forcing them to sweat over incomprehensible legal paperwork to get at money that’s due to them?
These are generally small balances, of less than £2,000, but it’s money that they deserve to be able to access it as easily as any other child. I should add that this is a problem that also affects the holders of junior ISAs too.
The MCA is there to protect the most vulnerable in society, no-one could possibly dispute that, and if we’re looking at large balances or perhaps big estates then the courts are absolutely the right route. However, where balances are less than £5,000, it really does feel that we are punishing a minority severely for what is actually quite a small risk.
Yet there are ways around this. A number of child trust fund providers, including OneFamily, have already established a process, whereby they will release the savings against documentation that the parents or carers already have. This has meant that we’ve been able to help 120 teens to access their money since September. We’re willing to take this risk on behalf of our young customers. If there were to be any dispute, then we would ensure that the young person’s savings were protected.
The Government set up a working group at the beginning of the year to look at this issue but their progress has, at times, felt frustratingly slow – especially since child trust funds have been coming to maturity at the rate of around 100,000 each month. However, after much lobbying and media pressure from the CTF providers, it does finally look like we are moving forward with a Government consultation set for the autumn.
It’s an urgent issue that needs a swift resolution. If around 200,000 young people can’t access their own money because of the barriers being placed in their way, then how can we honestly say that we’re being financially inclusive? So, I’m really hoping that a positive approach to resolving this problem might prevail in the aftermath of the consultation.
Afterall, our most vulnerable young people have the right to be able to access their savings just like anyone else.
OneFamily is the UK’s biggest child trust fund provider, holding over a quarter of the market.
The views, opinions and positions expressed within guest blogs are those of the authors and do not necessarily represent those of the BSA.