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Court Funds Office interest rates increased

Court Funds Office interest rates increased

The Lord Chancellor has raised the interest rates payable on both the special and basic accounts with the Court Funds Office (CFO) with effect from 23 August 2023. This is in response to the Bank of England Base Rate having been raised to 5.25% on 3 August 2023. The change is intended to ensure that account holders derive a higher interest rate in the current economic environment and that the CFO's running costs can continue to be met.

The increased rates are:

  • Special account – increased from 4.50% to 6.00%
  • Basic account – increased from 3.375% to 5.00%

With the special account now paying 6%, this is still slightly lower than the 6.8% CPIH rate of annual inflation registered for July 2023. The value of the money invested would erode over time, so long as inflation persists at a level higher than the interest being credited to the account. The decline in real-terms value of the invested amount would be more severe for the basic account, for which the interest rate is 5%.

The Court Funds Rules 2011 govern the handling of funds paid into and out of Court. Money is often paid into the CFO to be held on behalf of children and parties who lack capacity.

The same rate of interest is paid, irrespective of the amount invested. Interest is paid gross, without deducting any tax, so those who are not tax payers do not need to reclaim the tax. Interest is credited to the special account every six months, at the end of May and November each year. For the basic account, interest is credited at the end of March and September each year.

The CFO is part of the Ministry of Justice. Its postal address is in Sunderland.

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