Adults Lacking Mental Capacity: Child Trust Funds

Wednesday 28th October 2026 Lords Chamber

Question

15:06

Asked by

[Lord Young of Cookham]

To ask His Majesty’s Government what progress has been made in enabling access to Child Trust Funds on behalf of adults who lack mental capacity.

[The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Lemos) (Lab)]

My Lords, the Government are considering all potential options to resolve the issue of access to child trust funds. The round table held in July, hosted by my noble friend Lady Levitt, provided valuable perspectives on all options, and officials are moving forward with this work. The Government cannot endorse the banks’ exceptional processes. It is not consistent with the framework established by the Mental Capacity Act 2005 and the common-law principles that underpin it. However, we recognise the need to find a solution to this problem so that the money can reach those who own and need it.

[Lord Young of Cookham (Con)]

My Lords, I am grateful for that reply. Some £250 million is locked up in child trust funds, built up by children who are now adults but have a learning disability. The Government insist that the only way that these sums can be unlocked is by going through the Court of Protection, a cumbersome and at times expensive process that can take between six and 12 months. This deters many applicants and so the benefits are forgone. Will the Minister transform the lives of some 80,000 young people by building on the excellent work of his predecessor, the noble Baroness, Lady Levitt, who recognised that the present system was not fit for purpose, and promote quick and easy access to these funds to bring to an end a manifest injustice?

[Lord Lemos (Lab)]

I thank the noble Lord. We understand the seriousness of this problem and remain committed to resolving this long-standing issue of access to child trust funds for young adults who lack mental capacity. This is a high priority for Minister Richards, who has engaged extensively with stakeholders and wants to move quickly towards a practical solution. The Government are very hopeful of making progress in the coming weeks.

[Baroness Levitt (Lab)]

My Lords, the law currently requires parents of disabled adult children to navigate procedures which were designed to protect vulnerable people from fraud and financial abuse. Does my noble friend the Minister agree that, where parents are simply seeking to access a child trust fund or junior ISA on behalf of a son or daughter for whom they have cared all their lives, there is a strong case for a bespoke and proportionate process which starts from a position of trust rather than one of suspicion?

[Lord Lemos (Lab)]

I agree with my noble friend. Of course we do not think that all parents are a danger to their children; that would be ridiculous. As I have said, Minister Richards is looking for a solution in the coming weeks. However, as I am sure my noble friend would agree, not every adult has loving parents and the principles that underlie the Mental Capacity Act about adults—we are talking about adults—being entitled to agency over their own funds is an important one.

[Baroness Pinnock (LD)]

My Lords, at least three-quarters of a million funds have been unclaimed so far, and they are attracting “kindly tracer agents”—though scammers might be a more apposite description. What do the Government intend to do to enable those 750,000 young people to get access to those funds?

[Lord Lemos (Lab)]

The noble Baroness makes two points. I very much agree with the first one. It is deeply shocking, not just with this group of people but others, that scammers target people who lack mental capacity or have intellectual or learning disabilities. It is deeply immoral and disgraceful. On the question of accessing these funds, as I said to the noble Lord, Lord Young, we are working actively towards a solution to this problem and Minister Richards hopes to announce something in the coming weeks.

[Baroness Finlay of Llandaff (CB)]

My Lords, following on from the very helpful meeting that the noble Baroness, Lady Levitt, held with several of us who have been concerned about this for many years, could the Minister tell us when there have been meetings with the Court of Protection to develop a fast-track process that would be compatible with the Mental Capacity Act and avoid the delays and expenses that are incurred, but recognise that these funds mature when the child becomes an adult at the age of 18 and that they are therefore legally an adult-to-adult transfer?

[Lord Lemos (Lab)]

The noble Baroness knows that, since 2020, various changes have been made to the Court of Protection framework to make this easier and cheaper to deal with. I will not answer her question specifically, because this work is actively under way, but I am very happy to set out exactly what the arrangements are for the Court of Protection. It is important to reiterate that the Mental Capacity Act is there to protect people’s rights. We do not want to undermine that in any way, and we will not, but we will seek a solution to this problem.

[Baroness Kramer (LD)]

My Lords, this House used the opportunity of the Financial Services and Markets Bill to send an amendment to the other place which would enable the FCA to, in effect, enable financial institutions to release these funds based on their existing knowledge of the relationship between the parents, guardians and young people, whom they know because for many years those parents and guardians have been managing large sums of public money on that child’s behalf. Will the Government please take that seriously as the Bill is addressed down the other end, because it gets us around the dynamic of having to make very extensive changes to the Mental Capacity Act and delivers a practical solution?

[Lord Lemos (Lab)]

I am well aware of the amendments that the noble Baroness put down on child trust funds and junior ISAs. It is fair to say that slightly different issues are involved in child trust funds and junior ISAs, but, as I say—and I hope she can take some reassurance from this—we have considered her amendments, which are now in the other place, and thinking about a solution which resolves the issue of principle here, which is that parents who care for their children in a loving and trusting way should be able to help those now young adults to get access to these funds.

[Lord Keen of Elie (Con)]

My Lords, the Prime Minister has consistently talked of making quick fixes—although apparently that does not include the economy or defence. We have heard from noble Lords, including the noble Baroness, Lady Kramer, that this trust fund issue could be easily and quickly fixed. Will the Minister undertake to share the proposal with our quick-fix Prime Minister?

[Lord Lemos (Lab)]

I should demur from those observations about the economy and defence, having listened to the Budget with enthusiasm. I am not sure about quick fixes, but I am sure that the Prime Minister is aware of the need to resolve this problem. We will do so, because it has gone on too long; I do not seek to pretend otherwise.

[Lord Macintosh of Eastwood (Lab)]

My Lords, I thank my noble friend the Minister for the work he is doing to improve access to child trust funds for young people with reduced capacity. However, is he aware that there are thousands of disadvantaged young people who are not even aware that they have these child trust funds? Is he aware of the work of the Share Foundation, in particular the campaign for release at 21, and will he look into that with a view to liberating these funds for people who need them?

[Lord Lemos (Lab)]

I am aware of that work, and I pay tribute to all the charities and other campaigners. I pay particular tribute to Andrew Turner, who has been heavily involved in this campaign on behalf of his son, Mikey, and to Sir Ed Davey, the leader of the Liberal Democrats, whose thoughtful and persistent advocacy has done so much to ensure that this issue receives the attention it deserves.

[Noble Lords]

Hear, hear!

[Lord Lemos (Lab)]

I should have paused there. I endorse that “Hear, hear”—on this issue. The noble Lords, Lord Young and Lord Blunkett, have also played an important advocacy role on this subject. This is an important campaign and those are interesting and important proposals, and I thank the noble Lord for raising my good work—but, in fact, it is the work of Minister Richards and, before him, my noble friend Lady Levitt.

[Baroness Morris of Bolton (Con)]

My Lords, the Minister said he would write to the noble Baroness, Lady Finlay of Llandaff, to say what was happening with the Court of Protection. Could he also undertake to place a letter in the Library, because I am sure we would all like to know what the Court of Protection is doing on this?

[Lord Lemos (Lab)]

Yes, of course I will.

[Baroness Lister of Burtersett (Lab)]

My Lords, could my noble friend explain why the proposal for automatic release at 21 has not been accepted?

[Lord Lemos (Lab)]

I am not sure I quite said that. My noble friend will need to wait for the government announcement, which will come not in due course but in the coming weeks.