A Child Trust Fund (CTF) is an investment account given by the government to all children born between 1st September 2002 and 1st January 2011. The aim of the scheme was to ensure that all children had some savings when they reached their 18th birthday. Also generally children with disabilities were also given additional amounts above the initial £250.
However, due to a gap in the CTF guidance and rules, the CTF can only be accessed by the child when they are 18 if they have the capacity to understand and sign the documents that are required to either convert the CTF to an ISA and continue saving or to cash the CTF in and access the money. This is fine for a majority of children but does not take into account those children who do not have the mental capacity to do what is required.
For parents looking after these children to be able to act on their behalf they have to go through what can be an expensive and lengthy process with the Court of Protection to be able to access the funds for their children. This process was put in place to protect vulnerable children from being exploited and for good reason. However, sometimes these processes can have a detrimental impact as is the case here.
The issue has been covered by Channel 4 News and the BBC, please follow the links below to view the reports.
We would encourage you to watch the Channel 4 news item, which is available here and includes an associated interview with Vicky Foxcroft (Shadow Minister for Disabled People):
https://www.channel4.com/news/exclusive-the-disabled-young-people-locked-out-of-their-own-savings
The BBC coverage can be viewed here: https://www.youtube.com/watch?v=mUeM3I9zpA0
As a CTF provider we are bound by the guidance laid out by HMRC and therefore can only process CTF accounts in the manner as they determine. We have written to HMRC pointing out the gap in the guidance and requested that this be urgently updated to allow us to deal with disabled children in a more appropriate way. We will post updates here on our website as and when we get any newsworthy information.
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