August is officially marked as National Road Victim Month by RoadPeace, the UK charity that supports road crash victims and their families. As the month ends, it is an opportunity for us all to reflect on road safety, and to think of those who have been injured or killed on Britain's roads.

According to UK Government statistics, an average of 76 people per day were killed or seriously injured in road traffic accidents in the year to June 2019. For those who are injured, there is the well-publicised option of pursuing compensation by using litigation lawyers.

What is less publicised, is that once those individuals are awarded compensation, they or their guardian can then put the money into a special type of trust to safeguard it – a personal injury trust.

What's a personal injury trust?

Personal injury trusts are similar to other trusts, but they have a special status because they hold funds derived from a compensation award made as a consequence of a personal injury.

Why would I want to set one up?

There are generally three main reasons for setting up a PI trust:

  • Security of funds and asset protection – the trustees have control over the funds, which means that the compensation is protected from being squandered by the injured person or by family and friends, who may not be experienced in dealing with large sums.
  • Preservation of means tested benefits – putting compensation in a PI trust means the injured person will not lose any means tested benefits they are entitled to – but beware of the 52-week time limit for putting any compensation into a trust, after which means tested benefits will be affected.
  • If the injured person has lost capacity as a result of the accident, a PI trust can mean that the compensation can be looked after and used for the benefit of the injured person, without the need for a financial guardian in some cases, or can reduce the administration and related expenses required of a financial guardian.

How do I find out more?

More information on PI trusts, and how to set them up and administer them, can be found on our dedicated PI trusts web page and my colleague Jessica Flowerdew's blog.

To discuss individual circumstances, contact me or your usual contact.


Stewart Gibson

Senior Associate