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The new Guardianship Act is great news for lenders


Published: 4 May 2017 | Author: Bernard Clarke

Perhaps against the odds, the Guardianship (Missing Persons) Act was given Royal Assent just before parliament was dissolved. The Act, which allows close relatives of people who go missing to continue to administer their financial affairs, will be welcomed by lenders.

The new Act is a triumph for Thirsk Conservative MP Kevin Hollinrake, who has had widespread support – including from the charity, Missing People – for the 10-minute rule Bill on guardianship he introduced back in January. Bills like this rarely complete the legislative process either because they are opposed or there is not enough time to debate them. This is one of only around 60 such Bills since the second world war to be enacted. It was given Royal Assent on 27 April.

It will help lenders and their customers by providing a welcome and practical way of helping people who go missing – and their families. More than 80,000 adults are reported missing every year in Britain, and as many as 1,500 are not heard from for more than 12 months. Over and above the obvious worry this causes, families are often left with no means of administering the financial affairs of a missing person.

Filling the gap

The new Act fills this unwelcome gap by creating a new form of legal guardianship.  Confidentiality rules and other legal obligations often leave the financial affairs of a missing person in limbo. But the new Act will allow an appointed guardian to run the financial affairs in the best interests of the missing person in their absence. It will help lenders and relatives to make pragmatic arrangements that are currently impossible.

The Act draws on legislation in Canada and some Australian states, and gives similar powers to those for deputies appointed under the UK’s Mental Capacity Act 2005. This helps when someone is no longer able to manage their own affairs due to dementia or other mental incapacity.

As it passed through the Commons, Conservative MP Rebecca Pow described the legislation as “eminently straightforward and sensible” and “about helping the people left at home to deal with the property or the estates.”

And Mr Hollinrake pointed out that lenders, landlords, and utility and insurance companies could be prevented from speaking to anyone about a missing person’s affairs “for months or years.” He welcomed the CML’s support. We were happy to give it.

Next steps

With the Act only gaining Royal Assent days before parliament was dissolved, lenders will not yet be familiar with the powers it confers. 

The former government said it wanted to introduce the regulations required to underpin the Act within 12 months. When the new government is elected, we would be pleased to work closely with it to help ensure those regulations work for lenders and their customers. 

We have argued that it would help if the government were to provide a quick and reliable means of showing whether a guardian has a right to information, and to make decisions about a missing person’s property and financial affairs.

One option would be for the Office of the Public Guardian to keep a register of guardianship orders. It would be even more helpful if lenders could ask the guardian to see any order. 

Lenders will also want to be confident that their liability is limited if they administer a mortgage under the instructions of a guardian, or if they act in good faith without knowing that a guardianship order is now no longer valid. For these reasons, the next steps are crucial to ensure that the legislation becomes effective in practice, so that it can be of practical benefit when someone goes missing.