Author: David Webber
Children encouraged to save and become more financially aware
This week saw the Archbishop of Canterbury, the Most Reverend Justin Welby, propose the Church’s surprising initiative to teach primary school children about financial well-being. In a plan that’s been nicknamed ‘Welby’s Wonga’ by the press, children as young as four who attend Church schools will be invited to join saving clubs.
‘Safe’ Visa and debit card options for kids
It’s not the first time banking services have been launched specifically for children. In 2012, goHenry (previously called PKTMNY) launched a ‘safe’ Visa debit card for 8-15 year olds. Parents control the pre-paid card by topping up their child’s account online or through a mobile app, as well as where the card can be used and how much money can be withdrawn on it. It’s endorsed as a simple, safe and fun way for children to learn about money, and may well sound the death knoll for pocket money as we’ve known it.
Unfortunately though, such initiatives are few and far between. Most major banks set a minimum age of 11 for current accounts. However, this is much later than needed. Children should be learning to manage their finances as soon as they’re starting school. Moreover, enabling children to do this digitally is not only the natural mode for our next generation, but key for banks to recognise in order to retain their young customer base.
Digital banking for children
For NatWest’s young customers this comes complete with a raft of cartoon characters who preach the values of saving. Pigby, Pigasso and co. encourage kids to understand their finances and even have their own app, ‘Pigby’s Fair’. By lowering the minimum age to open an online bank account, banks can encourage better saving habits for the next generation.
Managing money from a younger age
In September this year, we conducted a survey of 2,000 UK consumers. This revealed that 83 per cent believe more banks should offer accounts for under 12s so they can learn how to manage money. This was strengthened by a sizeable 52 per cent believing they would be more responsible with their finances if they had started managing them from a younger age.
It is particularly important to engage children digitally, given they are now fluent in technology. A recent popular YouTube video depicting a toddler failing to understand why a magazine doesn’t work like an iPad demonstrates that children are now digital natives from an increasingly early age.
Banks need to ensure they’re speaking to children in a language they can understand. That means developing tailored digital services for children to manage their money, and reflecting on our responsibility to encourage the next generation in thinking about the value of money in society. As soon as children can read and write they should be learning to manage their finances, and banks could learn a valuable lesson from the Church’s example.