Eleven-year-olds across the borough will receive a cool £10 as part of a Southwark Council scheme encouraging young people to open savings accounts.
The £60,000 scheme is believed to be the first in the country, with councillors hoping it will help participating children avoid the ‘severe financial problems’ suffered by some of the residents in the borough.
All eleven-year-olds in the borough will be given the chance to set up their own bank account with the London Mutual Credit Union. Those who take up the opportunity will get £10 to start off their savings.
Cllr Fiona Colley, Southwark Cabinet Member for Finance, Strategy and Performance, said: “For many of us, opening a bank account was a rite of passage, but there are still a surprising number of people who don’t have a bank account, and who therefore are limited in their options for saving and borrowing. This great initiative will encourage young people to think about their finances, to plan for the future, and hopefully avoid the lure of payday lenders as they get older.” She added that 5% of UK residents do not have a bank account and often fail to save properly, which leads to a reliance on ‘extortionate’ payday loan companies.
Cllr Stephanie Cryan, Cabinet Member for Adult Care and Financial Inclusion, said: “We wanted to do something more long-term to help nip some of these problems in the bud and help our residents take control of their finances.”