Young people who lack the mental capacity to make financial decisions are set to gain a simpler route to their Child Trust Fund savings under Government plans announced on 3 November 2026. The proposed reforms are intended to remove a longstanding obstacle for families who have had to navigate a complex legal process to access money held for a young person’s benefit.
What has the Government announced?
The Ministry of Justice and HM Treasury have announced that new legislation will be introduced to create a more straightforward way for young adults who lack the mental capacity to manage their finances to access their Child Trust Funds.
Under the proposed approach, parents and carers are expected to be able to apply directly to the relevant Child Trust Fund provider. This would replace the need for families to rely on the often lengthy and costly Court of Protection process simply to gain access to the savings.
The Government says the change is intended to address an injustice affecting young people whose money has remained inaccessible because the original scheme did not provide a straightforward process for account holders who turned 18 without the mental capacity to manage their own financial affairs.
Why have families faced difficulties?
Child Trust Funds were introduced in 2005 to give children a financial asset to help them as they entered adulthood. However, the scheme did not provide a simple mechanism for 18-year-olds who lacked the mental capacity to make financial decisions to access their accounts.
As a result, families have faced legal and administrative barriers when seeking to use savings that belong to the young person. The Government says the existing route can involve a complicated and expensive application to the Court of Protection, creating additional pressure for parents and carers.
The announcement follows years of campaigning by families and organisations seeking a more proportionate process. The Government has acknowledged the difficulties experienced by families and says the proposed legislation is intended to remove unnecessary barriers while maintaining safeguards for young people.
Who could benefit from the reforms?
The proposed changes are expected to benefit an estimated 63,000 to 126,000 young adults who lack the mental capacity to make financial decisions and have Child Trust Fund savings.
The Government has said that the accounts are worth an average of around £2,600 each. The reforms could therefore make a significant amount of money accessible to young people and their families, although the precise eligibility requirements and evidence needed have yet to be set out.
The Government has indicated that campaigners, disability charities and representatives of the financial services sector will be involved in shaping the process.
How will the new process work?
The intended model is for parents and carers to deal directly with Child Trust Fund providers rather than having to make a Court of Protection application in every case. The Government says further work is needed to determine who will be able to apply, what evidence will be required and what safeguards should be put in place.
Those details are important because the money belongs to the young person. The new process will need to make access more practical for families while protecting the financial interests of people who cannot make the relevant decisions themselves.
The Government has said it will work with stakeholders to develop a proportionate system that avoids unnecessary and costly red tape without weakening those protections.
What role will the Court of Protection retain?
The announcement does not propose removing the Court of Protection’s wider role. The Government has expressly stated that the court will remain available as an alternative route for protecting the financial interests of adults who lack the mental capacity to make financial decisions.
The proposed scheme is therefore intended to provide a simpler route for accessing Child Trust Fund savings, rather than replacing the Court of Protection or changing its broader responsibilities.
What happens next?
The Government plans to bring forward an amendment to the Financial Services and Markets Bill to provide for the new scheme. Further operational details are expected to be included in secondary legislation after Parliamentary approval.
Until those provisions are approved and the process is established, the precise application requirements and safeguards remain to be confirmed. Families should therefore distinguish the Government’s announced intention from a process that is already available.
For solicitors advising families, the development is likely to be relevant to capacity, financial decision-making and applications involving the property and affairs of young adults. The practical impact will depend on the final legislation and the rules governing applications to account providers.
Frequently asked questions
What is a Child Trust Fund?
A Child Trust Fund is a long-term savings account introduced in 2005 for children. The money is intended to become available to the account holder in adulthood, subject to the rules governing access.
Why can some young adults not access their Child Trust Fund?
Some account holders lack the mental capacity to make financial decisions. The original scheme did not provide a straightforward access process for these circumstances, meaning families have often faced a Court of Protection application.
How many young people could be affected?
The Government estimates that between 63,000 and 126,000 young adults could benefit from the proposed reforms.
How much are the accounts worth?
The Government says the Child Trust Funds concerned are worth an average of approximately £2,600 each.
Will families be able to apply directly to providers now?
The Government has announced plans for this approach, but the new process is not yet fully set out. It will require legislation and further rules covering eligibility, evidence and safeguards.
Will the Court of Protection be abolished or replaced?
No. The Government has said that the Court of Protection will remain available as an alternative route to protect the financial interests of adults who lack mental capacity.