Since September, the first generation of 18-year-olds have started to be able to access the money in their child trust funds. These are savings accounts that the government set up back in 2005, into which parents were encouraged to pay to provide a nest egg for their children when they turned 18. However, many disabled young people find themselves locked out of their accounts, unable to access their own money.
I was first alerted to this problem by the father of Mikey, a young man who is severely disabled due to a neurodegenerative condition. Mikey turned 18 in September 2020, so he should have been among the very first young people to have access to their child trust fund. His parents and grandparents had paid into his account over the years to give him a modest sum of money that would be his own.
Mikey wants to use that money to buy a specially adapted tricycle. But, because of an unfair bureaucratic hurdle that should be easy for the government to fix, he cannot. Because his disabilities prevent him from managing his own finances, Mikey is not able to access that money himself. Of course, his parents should be able to do it on his behalf – but the rules governing child trust funds mean that they cannot.
There are tens of thousands of disabled young people with child trust funds who will find themselves in the same position as Mikey when they turn 18 – possibly as many as 150,000. Thousands more will face exactly the same problem when it comes to accessing their junior ISAs – the newer saving vehicles that replaced child trust funds.
Prohibitive costs
Under the current rules, parents can gain access to the funds only if they apply to the court of protection to be granted the legal power to manage their child’s finances.
The problem is cost – just making an application costs several hundred pounds. Add any legal fees, and the value of the child trust fund (an average of around £2,100) can quickly be swallowed up by what are, in effect, unfair exit penalties that apply only to disabled young people. And it is not just the financial penalty that disabled young people like Mikey and their families are facing. The court of protection process is slow; cases can drag on for more than six months and sometimes even a year until parents are given access to the accounts. For Mikey, his neurodegenerative condition means that every moment is precious.
His parents worry that by the time they have gone through the whole process, it will be too late for Mikey to buy that tricycle and enjoy it. Simply put, the court of protection route is not a good enough solution to allow disabled young people like Mikey to access their child trust funds.
First, it is clearly discriminatory: why should disabled young people have an extra fence and extra cost, compared to their peers? Second, all it does is add to the stress, hassle and bureaucracy that are sadly an all too common features of life as a carer.
Firsthand caring experience
I understand carers’ challenges very well. I have been a carer for much of my life. First as a teenager, nursing my mum during her long battle against bone cancer. Later for my nanna, organising her care and trying to make her last few years as comfortable as we could. And now, as a father, as Emily and I care for our disabled son John.
So I understand the challenges that millions of carers face every single day. I know that being a carer – whether for a disabled child, a terminally ill parent, or an elderly relative – can be rewarding and full of love. But I also know that it is far from a glamorous life. It can be relentless and exhausting.
That is why, when I became leader of the Liberal Democrats, I promised to be the voice of the nine million carers in our country. Because carers do a remarkable and important job but they are too often forgotten by those in power. Struggles like the one Mikey’s parents are going through are too often ignored or met with bureaucratic indifference – the “computer says no” attitude that is blind to people’s everyday lives.
I know how incredibly frustrating that can be as a carer, with the unnecessary bureaucracy, the endless battles and the feeling that you’re just not being listened to. As a carer, you accept some of that as an inevitable part of life. You grin and bear it. But, sometimes, it does wear you down. Sometimes, it feels almost designed to.
That’s how this one feels. None of this was intentional or anyone’s fault actually. Indeed, the Labour government that introduced child trust funds specifically encouraged parents of disabled children to set them up by giving them additional payments. But nobody told those parents about hurdles they would face – including these exit penalties.
Two solutions ignored
The really frustrating part is what happened when Mikey’s parents tried to get it fixed.
With the help of a specialist lawyer, they have tried to get the government to consider two proposals that would enable parents of severely disabled young people to access their child trust funds, without the need to go through the court of protection.
The first, put forward by industry bodies, involves giving the firms who manage the funds the discretion to release money to parents up to a certain amount, with safeguards in place so that it happens only where the child lacks the mental capacity to access the money themselves.
The second proposal is to extend the existing law that allows parents whose child is terminally ill to withdraw from child trust fund accounts on their behalf before they turn 18 so it covers mental capacity as well.
Together, these changes could make an enormous difference to tens of thousands of young disabled children and their carers. They don’t require much on the part of the government – a relatively small piece of secondary legislation and some guidance for providers. It should have been a quick fix – an easy win. Instead, as happens all too often, Mikey’s dad found himself passed back and forth between HMRC and the Ministry of Justice, with no one seemingly willing to give his problem – or his solutions – a genuine hearing.
That was when he came to me. I listened, then I took the issue straight to the top to the prime minister. At a prime minister’s questions session in October, I told Boris Johnson about Mikey, and urged him to consider his father’s proposals. He promised to look at them, so I am following this up with him and with ministers in the Treasury.
This is not a party political issue. It is an injustice affecting tens of thousands of disabled children, and one that should be relatively simple to put right. At no cost to the taxpayer.
All it needs is for ministers to listen to carers. And that’s why I’m determined to campaign for all carers.
Sir Ed Davey MP is the leader of the Liberal Democrat Party
