New proposals to allow families to access small funds for people who lack capacity

A new streamlined process has been proposed by the government to allow families of people who lack mental capacity to make withdrawals from cash-based accounts up to £2,500 without the need to get permission from the Court of Protection.

Currently, if a person lacks mental capacity and as a result cannot manage their finances, a family member or guardian must apply to the Court to manage these funds. This is to protect vulnerable people from fraud or abuse.

However, concerns have been raised that this can be a disproportionately costly and lengthy process to access relatively small amounts of money. The government has therefore launched a consultation on a new system to ease the administrative burden on families.

The proposed scheme would be run by the financial services sector, for example by banks or building societies and crucially, maintain important safeguards.

This 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 as opposed to 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.”

Easier for family members to access funds for their loved ones

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over a six month period, with the possibility of a single extension if the full value of the account had not been withdrawn.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 individual, rather than it being limited to only family members. For example a guardian.
• Once the maximum £2,500 has been withdrawn from an account no further withdrawals can be made.
• The scheme would be run by financial services firms, such as banks or building societies.
• 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 Mencap, said it was a welcome action.

He added: “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 the response to the consultation and determine whether legislative change is required.”The proposals test a range of security measures including requiring medical evidence to certify that the account holder lacks mental capacity to manage their own financial affairs.

The consultation will run for eight weeks.