Guidance on Young People's Bank Accounts

Contents

1. Introduction
2. Choosing and Opening an Account
3. Record Keeping and Managing Account Information

1. Introduction

Children and young people should be encouraged to open bank accounts both to encourage them to save and to enable them to acquire the skills they will need to manage their finances when they are.

2. Choosing and Opening an Account

It is important to choose an account which is suitable for the age of the young person. There is a variety of accounts available from different banks, and some of them offer accounts specifically designed for children. Accounts offering debit cards, for instance, may only be available to young people over 16. Children under 11 may only be able to open a passbook account and may need to be accompanied by an adult.

The account should be opened by the young person themselves in their own name. A key-worker may need to accompany them to give advice and, if necessary, verify their identity and address.

The key-worker should find out the best account for the young person taking into account their age, maturity and skills in handling money. Features such as how the account is managed, whether a cheque book or debit card is supplied and how funds are withdrawn should be taken into account. Not all accounts are free and some pay interest. Staff should not support a young person to open an account which they consider unsuitable for any reason, such as the availability of credit.

Payments into the account could include regular payments like the education bursary, the young person’s personal funds like pocket money and incentive payments and personal allowances like the birthday and festivity allowances. The decision whether to pay larger sums into the account would depend on an assessment of the young person’s ability to manage the money. It may be better for a birthday allowance, for example, to be spent under staff supervision. Only the young person should make payments into the account.

Only the young person should withdraw money from the account.

3. Record Keeping and Managing Account Information

Statements should be kept safe in the young person’s locked cabinet unless they ask staff to keep them safe.

The details of the bank account should be recorded in the finance section of the file. A record should be kept of the account number, sort code and correspondence and records of any payments in by the Home.

The young person should be advised to keep PIN numbers, debit card, stationery and statements in their locked safe or give them to staff for safe keeping. If kept by staff they should be kept with the file in a locked cabinet or in the safe.

Care should be taken so that telephone or on-line banking is not set up unless it is certain that the young person is able to manage the account safely and securely. They should only use a computer with appropriate protection and PIN numbers must be strong and be kept securely. Young people will need additional support with this type of account.