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Families could be helped to access savings belonging to vulnerable loved ones

·3-min read

Families will find it easier to access to small savings pots belonging to loved ones who lack mental capacity under Government plans.

A new streamlined process would allow withdrawals and payments from cash-based accounts, such as a Child Trust Fund (CTF) or a Junior Isa, of up to £2,500 without the need to get court permission.

The proposals apply to England and Wales, the Ministry of Justice (MoJ) said.

Currently, if someone lacks mental capacity and cannot manage their finances, a family member or guardian must apply to court to manage these funds. This protects vulnerable people from fraud or abuse.

But concerns have been raised that this can be a disproportionately costly and lengthy process to access relatively small amounts of money.

Dominic Raab
Deputy Prime Minister, Lord Chancellor and Secretary of State for Justice, Dominic Raab said he is determined to reduce the obstacles families and guardians face (Steve Parsons/PA)

On Tuesday, the Government launched a consultation on a new system to ease the admin burden on families.

The proposed scheme would be run by the financial services providers such as banks and building societies.

Some safeguards would still be included, with could include requiring medical evidence to certify the account holder lacks mental capacity to manage their own financial affairs, verification that funds will be used in the best interests of the account holder and paying money directly to the provider of goods and services rather than the applicant.

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

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

“It is essential that any change is considered carefully and based on evidence. I urge those with an interest to respond to this important consultation.”

Under the proposals, payments or withdrawals would be up to a total value of £2,500 over a six month period, with the possibility of a single extension if the full value of the account had not been withdrawn.

An applicant would have to prove their suitability to access the fund on behalf of the other person.

Once the maximum £2,500 has been withdrawn from an account no further withdrawals could be made.

In cases where longer term management of accounts is needed, families and guardians will be encouraged to consider a deputyship and to apply to the Court of Protection if necessary.

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.

“It is welcome action is being taken to consult on proposals for a more proportionate process where small amounts of money are involved.

“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.”

The Government will consider responses to the eight-week consultation and determine whether legislative change is required.

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