A £20 incentive is being offered to secondary school children in Hackney in a bid to help them learn how to save.
Around 2,500 pupils in the borough will be eligible for a savings account. Once an account has been opened, Hackney council will donate £20 to each child’s savings fund.
The scheme, which will cost the council £50,000, will be open to children who start secondary school in September. It has been undertaken to teach children how to manage their money responsibly, including budgeting, saving and handling cash.
The accounts must be requested by parents and will be locked until the savers turn 18, meaning no cash can be withdrawn before then.
Hackney councillor and Deputy Mayor, Sophie Linden, said: “We want to help young people become smart and savvy savers.
“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.”
The move was initiated as fewer young people are saving and the numbers are predicted to fall further in coming years. Some residents in the borough do not even have a bank account and often fall prey to loan sharks when they borrow money.
Rather than a bank account, the council is also urging parents to open accounts for their children with the not-for-profit London Community Credit Union. This organisation offers a safer place to save and also provides loans at reasonable rates of interest.