The Fostering Network responded to the All-Party Group on Financial Education for Young People inquiry into children in care and financial education in January 2019.
We used this opportunity to highlight the barriers foster carers can face when trying to open a bank account for the young person in their care.
Foster carers play a primary role in teaching the young people they care for about managing money and saving.
Opening a bank account is the crucial first step for young people in developing their financial independence, including learning to manage money and use internet and mobile banking. Most young people will have access to a choice of accounts once they turn 11 years old. However, those in foster care can face barriers that make it harder for them to open an account and as a result their financial education can suffer.
Financial education is critical to helping young people become independent. Without the ability to practice managing money in a safe environment, while living with their foster carer, those in foster care will be at a disadvantage compared to their peers who are living with their families.
In recent consultations with foster carers, they cited examples of having to visit five different banks before their fostered child’s account was opened or having to have a letter from a social worker redrafted three times before finally being accepted. These setbacks can mean delays between deciding to get an account and actually opening one, and for older children the risk of missing out on bursaries and grants if they are attending college.
Enquiries to our helpline for foster carers indicate that the main barriers are as follows:
- Parental responsibility (PR)
PR for young people in foster care usually sits with the corporate parent. It is not possible for foster carers to help those in their care to open an account when banks and building societies require the permission of someone with PR.
- Linked accounts
The requirement in some cases for young people’s accounts to be linked to an adult’s is also a barrier, particularly for those in short term placements.
- Proof of child’s identity
Almost all banks and building societies require an original copy of a child’s birth certificate or passport as proof of their identity. Foster carers do not routinely hold an original copy of the child’s birth certificate, and not all looked after children have a passport.
- Lack of clear and consistent information
Foster carers are unable to get information on what documentation they will need to set up an account for the young person. They often only find out what they need after completing online forms or having gone into branch for an appointment. Inconsistent approaches at different branches compound this problem.
For fostered young people to have an equal chance to develop their financial skills, banks and building societies must recognise their unique circumstances and needs. The Fostering Network would like to see the following recommendations implemented. They would not require any changes to the law and would improve the experience of setting up an account for foster carers and the children in their care.
- Banks should have an exemption policy for children in foster care, which is understood by all branch staff. It should recognise the need for some young people to be identified using a letter from their social worker.
- Banks and building societies must recognise that foster carers do not have parental responsibility but may have delegated authority to enable them to open an account on behalf of the young person in their care.
- Banks and building societies must recognise that it may not be appropriate for a young person in foster care to have their account linked to their foster carer’s.
- Banks and building societies should add specific guidance for foster carers and fostered young people on their websites.
The Fostering Network welcomes the inquiry into the financial education of children in care.