Children in Care - Pocket Money and Savings

1. Aim

That children and young people in care receive pocket money in a way which is fair and transparent, and that they are supported to develop the financial management skills they will need in the future to help them become safe and responsible adults.

2. Context

Children in care often miss out on opportunities to learn about money as part of everyday family life. Like their peers, they need opportunities to use and talk about money as they grow up - discussing the need to prioritise spending in relation to toys and clothing, food, rent and mortgages, household materials, utilities or the cost of going out with friends.

3. Views from Children in Care Council

• We need to be involved in decision- making;
• The process needs to be fair and transparent;
• We need to be clear who is responsible for what;
• All staff and carers need to meet their corporate parenting responsibilities;
• Need to stop inconsistencies;
• We agree to being encouraged to save regularly and feel the recommended amounts are fair.

4. Objectives

• Clear information for children and young people on their responsibilities as well as rights;
• Young people are supported to develop the financial management skills they will need in the future;
• Young people will hold and manage bank accounts and build savings, including using ISAs;
• Support, guidance and expectations will be developed for foster carers which reflects their role as primary carer;
• Support, guidance and expectations will be produced for residential homes;
• Support, guidance and clear expectations will be produced for social workers and Independent Reviewing Officers;
• Support to determine what success looks like for each young person;
• Provide tools for young people and those around them.

5. Overall Policy

All Children in Care are entitled to receive pocket money allowances. Some young people will also have earnings and / or training allowances, or specific benefits. It is intended that this policy strikes a balance between ensuring that Children in Care are treated fairly wherever they live, with the need to reduce, as far as possible, any bureaucracy or stigmatisation, or providing excessive guidance which affects fostering family life or day to day living. The aim is to support carers to act as responsible parents.

Financial details – 2020/21

Guidance for recommended pocket money rates (payable from household element for children in foster care) and savings.

Recommended personal allowance rates have been set with the expectation that children in foster care and residential care receive the same level of pocket money.

6. Principles

6.1 Getting involved

Children should be encouraged to manage their own finances and are to be given as much freedom as possible (taking into account their age and understanding) in making informed decisions about spending their own money.

6.2 Developing Money Skillset

Foster carers and Children's Home staff should be enabled to act as reasonable parents who act in Loco parentis and are trusted to make fair, reasonable and transparent decisions. They will assist and support children in their decision making help them to develop the knowledge and skills necessary to manage their finances successfully. Children need to learn budgeting skills and need to be assisted in using appropriate financial organisations such as banks, building societies and government savings schemes. If possible, parental guidance should be sought on these matters for those children under 16 years.

6.3 Learning safe keeping

Children's money is to be kept safe. Young people should be offered the facility to store their money securely. Children should be enabled to open and maintain bank accounts and, if possible, their pocket money should be paid into these accounts.

6.4 Making right choices

If there are concerns about the manner in which children are spending their money or allowances, these concerns should be discussed with the child and their social worker. If there is a serious risk, the arrangements for giving money to the child may have to be restricted, but the child's social worker needs to be actively involved or informed of such decision-making and this should be reviewed.

6.5 Taking responsibility

In some circumstances a child/young person can be asked to pay a contribution from their pocket money towards the cost of any repair of or replacement for misappropriated monies or goods. This needs to be discussed with the child's social worker unless already resolved in the delegated responsibilities agreement and/or placement plan.

Use of monetary rewards should be an exception (as this reinforces reward expectation).

7. Delegated Responsibilities

The start of the life and money skills journey will be at the beginning of coming into care, building on knowledge already held by children and young people. The action plan can be informed by the assessment, discussed and agreed as part of placement planning and review arrangements, with attention paid to who does what regarding delegated responsibilities. This needs to include consideration of the role of families or other significant people.

8. Checklist for Carers, Social Workers, Key Workers

If a child is coming into care from home:

• Make new financial arrangements:
  • Set up bank account (preferably child and carer together – see bank guidance);
  • Make savings plan (child and carer to agree what this means and how to enable child to learn/take appropriate level of responsibility);
  • Agree pocket money – how it's going to be managed.
• Complete life skills assessment/toolkit relevant to child.

If child is moving where they live:

• Check previous assessments;
• Confirm financial arrangements that the child comes to placement with, and make necessary arrangements for changes (e.g. change of address on bank account, locate previous savings and identify how they will be moved);
• Complete life skills assessment/toolkit relevant to child.

N.B. The Fostering Service have developed a presentation for foster carer support groups.

9. Support, Guidance and Expectations for Child's Social Workers and Independent Reviewing Officers

• Include saving in placement planning meetings;
• Address promptly if young person has moved where they live;
• Discuss when do joint visit with Supervising social worker;
• Discussion at review - standing agenda item- and check review actions followed through e.g. opening bank account;
• Review progress and use/share tools with young person and get their views on how pocket money and savings are working;
• SW will respect that foster carers and residential home are parenting the young person – so sensitivity on how issues are addressed;
• Equal oversight – independent provision and DCC – and feedback to SSW/home/contracts team if problems;
• Signpost carers to the right guidance – toolkits;
• Where relevant- check how bursary or DLA are being used.

10. Financial Management Toolkit

All carers and staff working with Children in Care have a responsibility to help them develop budgeting skills and financial capability. Financial capability is the ability to manage one's finances and to become a confident, questioning and informed consumer of financial services. It is a lifelong process and concerns the ability to make ends meet, keep track of finances, plan ahead, choose financial products and services and stay informed about changes and developments in financial matters.

The best approach will depend on the child or young person and where they live – but can include:

• Planning and shopping together for clothes and food;
• Enabling young people to manage their own clothing allowance;
• Promoting use of activities and resources which are free as part of preparation for independence;
• Saving linked to phone bills or other predictable costs.

11. Young People Holding and Managing Bank Accounts and Building Savings, including Using ISAs

11.1 Bank Accounts

Child's bank account is to be discussed at the initial delegated responsibilities /Placement Planning Meeting and a decision is to be made as to who is responsible for this. The account is then discussed at the first review meeting and subsequent meetings if there are any issues and to encourage oversight of savings.

If the child is moving placement, the funds from the previous bank account moves with them. I.e. The account is closed, a cheque is issued to allow a new account to be opened with the new carers. The bank account would only need to be closed if the account was held jointly by foster carer and child, some accounts may be solely in the child's name and these would not need closing, just change of address.

All of this information is to be highlighted during review. The bank account chosen for the child must have a no overdraft facility.

11.2 Bank Account Guidance

It is important to involve the child, regardless of age, in opening a bank account when they first come into care or there is a change of their circumstances, such as change of address. Different banks will have different requirements.

The foster carer and bank will discuss which bank account which is best for the child and their circumstances. Factors to consider include:

• No overdraft facility;
• Having 2 accounts – instant access and saving.

There are bank apps which can be accessed - 'Go Henry' is recommended and provides a money card.

Both TSB and Nationwide have recently been helpful for young people in care.

ID should be provided such as child's birth certificate (copies can be purchased), passport, foster carer identification and proof of address are possibilities of what may be required. It is recommended that either the child or foster carer keep bank statements. It would be good practice that somebody checks these with the child i.e. social worker or foster carer. If any fraudulent activity is noted, the child/foster carer/social worker should notify the bank.

11.3 Savings

Foster carers and staff are to promote savings and help children spend safely. Think about save to spend not save to hoard. Examples include mobile phone bills, driving lessons, family presents. The chart above shows expected amounts to save each week and it is anticipated that the money be saved for at least a month to be able to buy something specific.

Pitfall of savings

When children reach 18 years and leave care they can be vulnerable to financial abuse so it is not recommended that they have a large amount of accessible savings at that time. Staff and carers need to be aware that other than exceptional circumstances, such as severe learning disability, it is not possible to prevent them accessing their savings. Establishing an account with a notice period can help young people who may regret spontaneous spending.

Also consider savings can impact on entitlement to benefits.

Withdrawing from savings

If additional ID is required the social worker can provide a letter confirming the child is in care (looked after by the authority) and this is signed by a manager.

We would advise the foster carer to have a conversation with the bank. If child is vulnerable in any way i.e. exploitation, or withdrawing large amounts of money, this would be of concern and may result in requesting a cap on the account. Foster carers and the bank can agree an amount/limit that can be withdrawn to avoid loss.

If 16 years plus

Young person has more control over their account and the foster carers are possibly limited. Foster carer to contact bank, leave details and request the bank alert them should they have concerns about how young person is managing their account. The bank may not be able to do this however it is recorded that this request was made.

Transfer or placement change

Adults responsible for the child need to be aware that funds cannot be transferred. Therefore the child's account needs to be closed requesting funds be paid in the form of a cheque and made payable to the child. The account is then closed and a new one opened by the new carers.

ISAs

The Share Foundation runs the Junior ISA scheme for children and young people in care (known as 'Looked After') on behalf of the Department for Education. The Share Foundation, or 'Sharefound' for short, has been running the Department for Education's Junior ISA scheme for looked after children and young people since 2012. An account is opened for every child and young person under 18 throughout the United Kingdom who has been in care continuously for at least one year and who doesn't already have a Child Trust Fund. Local authorities are required by Government to provide the Share Foundation with the necessary details, so an account is opened, drawing down £200/£250 from the Department for Education.

The money in a Junior ISA belongs to the young person, but they can't take the money out until they are 18. They can then decide what they want to do with it. If the young person chooses not to take the money out, the Junior ISA will automatically become a regular ISA.

Junior ISAs replaced Child Trust Funds, which ceased to receive state contributions in 2010. However, children – including those in care - born between 1st September 2002 and 2nd January 2011 are entitled to a CTF, which should already be open and active.

For more information on Child Trust Funds for children in care, including how to make payments into it, see GOV.UK - Child Trust Fund for local authorities.

Derbyshire's Management information team provides regular updates of children in care to Sharefound. Administration of ISAs such as holding a list of current recipients, uploading information to Mosaic and contacting relevant staff on receipt of information from Sharefound is undertaken by the Fostering and Adoption BS team on 01629 532216. It can take up to 3 months from a young person turning 18 until they receive their money.

The Head of Service, Children in Care provision, is the named management contact for Sharefound.

More information including leaflets aimed at young people and foster carers can be found on The Share Foundation website.

Further financial education resources are available at Young Money website or The Share Foundation website.

12. Young People in Receipt of Bursary

Young people in care who are in Further Education are eligible for a bursary which will be paid either weekly, monthly or termly directly to the young person. The bursary initially should be used to fund travel, food and equipment for their FE placement, the young person can choose to take responsibility for paying for these upon receipt of their periodic Bursary allowance or request for the establishment to provide travel cards, food cards and equipment needed and the money be deducted before receiving their bursary allowance – this should be discussed with the young person and the FE Establishment how best to meet their needs whilst allowing the young person to make choices. Once costs for participation have been met the remainder of the Bursary is for the young person to use as their own personal allowance and can spend/save this as they wish.

As each FE Establishment may have a different procedure on how the Bursary is paid it is suggested that Foster Carers work with the Young Person around understanding their Bursary and what it is expected to cover, budgeting and how to manage their money responsibly. It is also advised that Foster Carers make contact with the FE Establishment to ascertain their Bursary procedure to enable them to work together to meet the needs of the Young Person.

13. Disabled Young People

Learning how to budget is a valuable skill that children and young people should acquire as they grow. This is especially important for young people who have learning disabilities who are at particular risks of having poor financial management skills, as they are accustomed to parents or carer managing their money for them. Poor money management skills makes them more vulnerable to being financially abused.

Foster carers have an important role in supporting disabled children and young people to learn money management skills.

Mild to moderate learning disabilities

Children/young people who have a mild to moderate learning disability can have an active part in managing their pocket money, for example supported in managing small amounts of money and encouraged to pay for things in shops. Foster carers can teach them the value of coins and notes, and talk with them about saving money to buy larger items. They can be involved in deciding how to spend their money, opening a savings account and going to the bank to add to the savings.

Children with learning disabilities may benefit from visual aids e.g. a picture of an item they are saving for, with a target next to it showing how much they have saved so far. Social stories can also support this. The Money Helper Website has produced a 'toolkit' of resources and activities to help people with learning disabilities learn about managing money.

Severe learning disabilities

Some children and young people have a severe learning disability. These children and young people are likely to be dependent on others to manage their money on their behalf. For these children, it is particularly important that foster carers are supported in deciding how much of the pocket money can be spent and how much should be saved, and what the savings are used for. These decisions should be made in discussion with the child's social workers and shared at the child's reviews. It is also good practice for the foster carer to keep a note of what the money has been spent on, and keep receipts for larger spends. It is intended that some of the pocket money can be spent for fun or on treats (small toys or books or a trip to a soft play centre for example). If the child/young person has a short break with another carer, they can take some pocket money with them to spend. Some of the pocket money can be saved for particular items that cost more such as trips out or a particular toy, additional clothing, activities (such as specialist cycle hire or sensory play) and additional treats on holiday/day trips.

• Attention needs to be paid to considering future needs and helping the young people transfer to adult life and services when the time comes;
• This includes early consideration of Mental Capacity Assessment where relevant.

DLA/PIP

If children are in receipt of DLA/PIP, foster carers are responsible for supporting the child in managing this, or managing it on their behalf.

DLA/PIP is intended to meet the assessed additional needs and costs that arise out of that child's disability e.g. the need for more heating or additional laundry costs. DLA is intended to support everyday living. It can be spent on a range of activities and equipment to meet the child's additional needs.

The mobility component of the payment can be used to purchase a vehicle (and insurance) to be used for the child- if the child moves, this vehicle is returned.

If the child/young person moves placement, the foster carer must advise DLA/PIP that the child has moved, and the payment transferred to the new foster carer. The new foster carer can then take over managing the payments.

There is already guidance for foster carers on DLA and an agreement which foster carers are asked to sign.

When a child is placed, the agreement should be discussed with foster carers and signed by them. It is stored in the child's electronic file and should be reviewed at regular intervals at the child's review.

Part of this agreement is that foster carers open a bank account in the child's name for the payments to go into. The agreement states that:

• The child's bank statement details should be kept by the foster carer, along with records and details of expenditure in the form of receipts. These records should be entered onto the child's file on a three-monthly basis by the child's social worker;
• Supervising Social Workers will be responsible for ensuring that Foster Carers are aware of their duties within the policy;
• Independent Reviewing Officers will have an overview of DLA claims and its use within individual care plans for children and young people.

See also:

• 'BILD' website - has advice about banking and other money skills, with clear guidance and worksheets;
• 'Money, Rights and Risks' - information about money and learning disability - including research;
• Money Helper Website - Good suggestions for activities to try, with worksheets.

14. Support, Guidance and Expectations

Foster Carers:

Enables Foster Carers to make reasonable decisions as good parent and know that they will be supported

• Pocket money;
• Savings – How to spend – see tools Life Skills and Getting Ready for Adult life;
• Sanctions – Managing Risk – regular review;
• Individual circumstances + broad principles.

Supervising Social Workers:

• Talk through pocket money issues and savings with foster carers;
• Share tools;
• Discuss sanctions – managing risk – regular review.

Independent Foster Carers:

• Same as DCC;
• Compliance with Framework;
• Recognise have own company policies;
• Bench mark re: progress.

Children's Homes Staff (DCC):
See also: Derbyshire Children's Homes Procedures.

Rewards, Incentives and Privileges

Systems of rewards and extensions of privileges should be operated within homes, which encourage children and young people to behave through the use of positive re-inforcement. The extensive imposition of disciplinary measures can create confrontational situations unnecessarily and often exacerbates challenging behaviour. It is not appropriate or constructive to begin from a base line of no privilege or reward, as many children and young people will be unable to make substantial progress in such a system due to a reinforcement of their low self-esteem. Reward systems should always be based on an easily achievable minimum level.

Each home should have a written, agreed and workable rewards, incentives and privileges scheme which has been agreed with the children and young people living at the home. Children and young people should be involved in the creation of this to ensure the scheme is meaningful, realistic based on achievable targets in order to promote the positive desired effect to potentially change negative behaviour. The policy should be frequently monitored and reviewed as the group changes to meet current need. Good behaviour should be encouraged by the frequent expression of approval by staff and the generous and realistic rewards.

Staff should be proactive in encouraging good behaviour, i.e. reward and encourage good behaviour. Incentive rewards could include opportunities to earn extra pocket money or privileges, but don't forget that positive gesture such as a nod, smile and to confirm approval by acknowledgement as methods of reward. Incentives that encourage quality time with carer's/other young people and give opportunities to enjoy and explore their hobbies, interests and passions should be prioritised. Any form of incentive that builds positive relationships, builds confidence or develops skills should be promoted.

Children's Homes may not fine children and the use of the word "fine" must not be used in any description of sanctions involving the stopping of pocket money. The total amount of pocket money may only be reduced by two thirds of the child's/young person's pocket money in any one week, this would include taking into consideration any court fines. This type of sanction would be appropriate for a child who has damaged/stolen another child's belongings.

Restorative discussions, looking past negative behaviours and identifying underlying issues and working through these with the young people would be a far more effective process of dealing with damages or stolen items; stopping/reducing pocket money should only be used when appropriate.

See also, useful online resources for the Money Toolkit.

Withholding Pocket Money

This refers to a situation where a child is temporarily deprived of their pocket money but the money remains theirs and is given to them at a later time or date. Pocket Money may be briefly withheld as an incentive for a child/young person to complete a chore or in more serious circumstances withheld or spent under the direct supervision of staff where there are firm grounds for believing they will use their money in a way that is harmful to themselves or others. However, staff should be mindful that withholding or stopping pocket money may lead to the child/young person resorting to other means, such as stealing, in order to make up for the lack of money. This type of sanction would be appropriate for a child who is misusing alcohol, drugs or solvents.

Bursary Process

Prior to a young person receiving their initial bursary payment staff sit down with the young person, help work out approximately how much bursary they are going to receive and discuss what the young person would like to do with the remainder of the instalment. The young person would take into account and budget how much they will need for their dinner money for the upcoming term (as this is partly what the bursary is for) and the young person will decide if they want to save the remainder or identify what they want to spend this on, staff encourage practical purchases that reflect their interests and hobbies.

Independent Children's Homes:

• Transparency with young person and social worker;
• Same as DCC;
• Compliance with Framework;
• Recognise have own company policies;
• Bench mark re: progress;
• Use relevant toolkits.

15. Further Advice and Information

You, Your Kids and Money (Money Advice Service)

Pocket Money and Savings - Key Points for Foster Carers