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Awards made to children

When a Judge or Master orders damages (money) to be paid "into court" for the benefit of a child, we are responsible for looking after the money and open an account in the name of the child.  We will hold the money until the child's 18th birthday (known as date of majority), unless a court order instructs otherwise. 

The money will either be held as a cash deposit in our Special Account, which pays a competitive gross rate of interest, with no tax deducted, or some of it may be used to buy equity investments, usually units in the Ministry of Justice in-house Equity Index Tracker Fund, which is managed for us by Legal & General.  Money invested in this way would be expected to grow in value over the medium to longer term.  Any remaining money would be held as a cash deposit in our Special Account.

The way the funds are invested will depend on the direction of the court, which may be for: 

• Capital growth (which means a substantial amount will be held in equities and a smaller amount as a cash deposit in the Special Account), or
• Capital growth with some income (which means a more even balance between equity investment and cash deposit in the Special Account), or
• Maximum income (which means, at present, it will all be held as a cash deposit in the Special Account).

Consideration is given as to how much money has been awarded and how long the funds are expected to stay in court. Each case is different, but as a rule, where the award is for £5,000 or less, or has less than 5 years until the child reaches 18, or the court has directed maximum income, all the money will be deposited in the Special Account.

 In other cases, according to the investment advice we receive, a proportion will be used to buy equity investments and the remaining money placed as a cash deposit in the Special Account.