The £5,000 rule that could catch your clients off guard

When my son was diagnosed, I learned something most experienced advisers already sense but rarely say out loud: no single professional has all the answers for a SEND family like mine. That’s why I founded SENDA, and it’s why Special Needs Planning matters so much to the advisers we work with.

One issue sits in the background of more client relationships than most advisers realise. If a client has a disabled or additional-needs child, there’s a good chance a Child Trust Fund (CTF) or Junior ISA is quietly building up in that child’s name. When the child turns 18 and lacks the mental capacity to manage the money, the family often can’t touch it without going to the Court of Protection.

Most families don’t see this coming until it has already happened. It’s one of the clearest blind spots in Special Needs Planning, and right now the rules are starting to change.

Why Child Trust Funds and Junior ISAs get locked at 18

Both accounts belong to the child. Until 18, a parent manages them. On the child’s 18th birthday, control passes to the young person, and the provider can only deal with them or someone with legal authority to act for them.

If the young person lacks capacity under the Mental Capacity Act 2005, a parent has no automatic right to access the money. A DWP appointeeship for benefits doesn’t cover savings. Without a lasting power of attorney (which requires capacity to make), the usual route is a deputyship order from the Court of Protection.

The scale is significant. Children born between September 2002 and January 2011 received a Child Trust Fund, and disabled children got extra government contributions. The Ministry of Justice has estimated that between 63,000 and 126,000 young people may fall into this category, according to a 2024 House of Commons debate.

What the Court of Protection route involves for families

Applying for deputyship means court forms, a capacity assessment, fees and, often, months of waiting. Once appointed, a deputy is supervised and must account for how the money is spent.

For many families, the Child Trust Fund or Junior ISA holds a modest sum. The cost, time and stress of a court application can feel out of all proportion to the amount involved. Some families simply leave the money untouched.

That’s why this matters for advisers. The family’s first question is rarely “how do I apply to the Court of Protection?” It’s “why didn’t anyone tell us this would happen?”

What’s changing: the FCA review and the Baroness Kramer amendment

Change is now moving on two fronts.

  • The FCA review. The Financial Conduct Authority has launched a review into unclaimed Child Trust Funds. It will specifically look at the hurdles parents face when accessing funds for a disabled young person, and is due to conclude in 2027.
  • The House of Lords amendment. The Lords has backed an amendment to the Financial Services and Markets Bill, tabled by Baroness Kramer. It would require the FCA to make rules letting providers release up to £5,000 in any 12 months from a CTF or Junior ISA to someone acting in the young person’s best interests, without a Court of Protection application. It still needs to pass the House of Commons.

Since I attended the House of Commons event on this in March 2026, the pace has picked up considerably. Whichever route wins, clients with Child Trust Funds or Junior ISAs for disabled children will need advice soon.

What advisers should do now

You don’t need to wait for the law to change to add value. Start with these steps:

  1. Ask the question. Find out whether any client has a disabled or additional-needs child, and whether that child has a Child Trust Fund or Junior ISA.
  2. Check the timeline. Note how close the child is to 18. The Mental Capacity Act applies from age 16, so conversations should start early.
  3. Talk to the provider. Some providers now have dedicated guidance and support teams for families whose child lacks capacity.
  4. Look at the wider plan. A CTF or Junior ISA is often just the first sign of bigger questions around wills, trusts, benefits and long-term care.
  5. Build your specialist knowledge. Our Special Needs Planning training covers capacity, deputyship, trusts and benefits for financial, legal and charity advisers.

Stay ahead in Special Needs Planning

We’ll be tracking the FCA review and the Baroness Kramer amendment as they progress. To stay up to date on everything relating to Special Needs Planning, sign up to our monthly newsletter.