The government has announced it is to change the rules to allow easier access to Child Trust Funds where the owner is deemed not to have mental capacity.
Under current rules, families need to apply to the Court of Protection for access to accounts.
Once legislation is passed, they will be able to go direct to providers for access.
The government estimates that 63,000 to 126,000 vulnerable young adults will benefit from the change.
About 6.3m CTF accounts were set up between 2002 and 2011 with the government offering a £250 voucher to encourage initial take up.
While CTFs were a government scheme, the money has been held by CTF providers.
CTFs were originally set up for children born between 1 September 2002 and 2 January 2011 with a live Child Benefit claim. Parents and guardians received a voucher for at least £250 to deposit in a Child Trust Fund (CTF) account on behalf of an eligible child.
CTFs were replaced by Junior ISAs in 2011.
Sarah Coles, head of personal finance at platform AJ Bell, said under the previous system families could wait for months to access the funds.
She said: “The government has been aware of the problem since the outset. It ran a consultation in 2021 and 2022, looking into whether there could be special rules for small payments – so people could withdraw sums up to £2,500 direct from providers. While 87% of people responding to the consultation supported it, the government decided not to implement it.
“Instead, it offered some movement on digital applications and financial support for the legalities. It left campaigners feeling like they’d been sent back to square one. The news that the government is finally adopting a pragmatic and straightforward solution will be music to their ears.”
The government is to bring forward an amendment to the Financial Services and Markets Bill for the legislation needed to enable the new scheme.