Mental Capacity Act 2005: Small Payments Scheme

Lord Touhig Excerpts

Thursday 2nd March 2023 Lords Chamber

[Lord Bellamy (Con)]

My Lords, essentially, there was general support for the idea of some sort of scheme, or at least some simplification of the process, but no consensus on what safeguards we should have. In particular, most banks and financial services companies expressed concerns about what they would have to do to carry out the relevant checks. There would be quite a small demand and it would be quite expensive for most institutions to provide the relevant service. In those circumstances, the Government decided that this was a case where we should avoid legislation and work to improve the present system.

[Lord Touhig (Lab)]

My Lords, do His Majesty’s Government know how many of the 6 million child trust fund holders lack capacity? If this is not known, how can fund providers be sure that it is right to release funds to third parties? I ask this question because there is concern that some fund providers are not as diligent as they ought to be in this regard.

[Lord Bellamy (Con)]

My Lords, I cannot comment on how fund providers operate their relevant systems. The number of adults holding child trust funds who have become adults and lack capacity is quite small—it is thought to be around 1% to 2% percent—but it is none the less significant and the risk of abuse is quite prominent.