Families Could Be Given Easier Access to Savings of Vulnerable Loved Ones


November 2021

Families Could Be Given Easier Access to Savings of Vulnerable Loved Ones

A new streamlined process could allow guardians to make withdrawals from small savings accounts belonging to family members who lack mental capacity, the government said.

The Ministry of Justice has proposed a new system to reduce the administrative burden on families trying to manage the finances of vulnerable young people.

Currently, if a person lacks mental capacity and can’t manage their own finances, a parent or guardian must apply to the court to access funds in their name. The system is designed to protect vulnerable people from abuse or fraud.

However, concerns have been raised that this process is unduly long and costly for access to small sums of money. 

Dan Scorer, head of policy and public affairs at the learning disability charity Mencap said: “Over the last year families of young people with a learning disability have highlighted the significant barriers and cost faced in accessing Child Trust Fund money for their loved ones.”

Dominic Raab, Deputy Prime Minister, Lord Chancellor and Secretary of State for Justice, said he was “determined to reduce the obstacles families and guardians face when they are supporting vulnerable people who lack mental capacity.”

Under the proposals, which would apply to England and Wales, families would be able to make withdrawals and payments of up to £2,500 from cash-based accounts such as a Child Trust Fund (CTF) or a Junior ISA, without needing court permission.

Safeguards will remain in place to ensure the vulnerable person isn’t being exploited. This could include requiring medical evidence to confirm the account holder lacks the mental capacity to manage their own financial affairs and demonstrating that the funds will be used in the best interests of the account holder and that the applicant is suitable to access the funds. 

The money could also be paid directly to the provider of goods and services rather than the applicant. The system would be administered by financial services providers such as banks and building societies.

Once a maximum of £2,500 is withdrawn from the account no further withdrawals could be made. If longer-term management of finances is required, families and guardians would be urged to consider a deputyship and apply to the Court of Protection if necessary.

Raab said: “These plans will make it easier and less stressful to access small funds while maintaining vital safeguards to prevent abuse and fraud.”

Plans for “a more proportionate process” were welcomed by Mencap. “The complexity of the legal system is a recognised barrier and the aim of a simpler and quicker process, which still has appropriate safeguards, is welcome. We will look carefully at the proposals in the consultation, but changes made must both make it easier for family members to access funds for their loved ones whilst including appropriate safeguards,” Scorer said.

The government will hold an eight-week consultation and determine if legislative changes are required.