An east London council will plough up to £50,000 a year into giving secondary school children their own savings accounts – complete with a £20 incentive to start putting cash away.
Hackney Council is to give children the cash to enable them to set up a credit union savings account.
The council hopes the scheme will help teach young people financial management and help avoid the use of payday loans in the future. Schools will also run sessions on budgeting and saving money.
But the accounts, which must be requested by parents before they can be opened, will be locked until the savers turn 18, meaning no cash can be withdrawn for seven years.
And rather than a bank account, the council is asking parents to open accounts for their children with the not-for-profit London Community Credit Union.
“We want to help young people become smart and savvy savers as well as being able to make sound financial decisions throughout their lives,” said deputy mayor Cllr Sophie Linden.
“Many young people have little or no experience of dealing with banks and financial matters while they are growing up. This can make it difficult when they do have to make decisions about money and other financial issues.
“By offering a savings account at a time in a young person’s life when they can start to manage their own money, we hope to give them a helping hand and a start on the savings ladder.”
It follows a similar scheme set up by Haringey council, which paid £10 into the accounts, last year.
At Birchwood we understand that it is never too early to start saving for yourself or your family. Financial freedom is one of the greatest gifts you can give. With a little wise planning now your children and grandchildren’s financial future could be secured.