The Government has announced it will fund a pilot scheme to set up savings clubs in primary schools in a bid to help prevent children racking up debts later on in life.
The network of savings clubs in primary schools was proposed last month by the Task Group on Responsible Credit and Savings, led by Justin Welby, the Archbishop of Canterbury at the beginning of the year.
Today, Andrea Leadsom, the economic secretary to the treasury, announced it has earmarked £150,000 to fund the pilot programme in six schools next year in South East London, Bradford and Nottingham, before rolling out to up to 100 schools in the next four years. It expects this will benefit up to 30,000 pupils.
The taskforce was launched in the wake of comments by the archbishop that the Church of England wanted to "compete" payday lenders out of existence by highlighting credit unions as a better way to borrow. (See MoneySavingExpert.com's Best children's savings guide.)
MoneySavingExpert.com successfully campaigned for financial education to be added to the national curriculum in England from September 2014. However, this is only compulsory for around half of all schools – free schools and academies don't need to follow it.
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What can children expect from the scheme?
The Church of England said the 'Lifesavers' project was needed to help teach youngsters "financial awareness" from an early age as research showed they develop their attitudes to money by the age of seven.
It will aim to equip children with good financial habits by teaching them about the role money plays in our lives, how to manage money and managing the risk and emotions associated with money.
Children will also be able to save small, regular amounts of money and could even be given a chance to run the groups, for example, by working as junior cashiers or bank managers.
Parents and school staff will also be able to sign up to the clubs to open special accounts to save for particular expenses such as school trips and uniforms.
Kids will also be introduced to credit unions – usually small financial co-operatives set up by local communities and other groups such as trade unions – which provide financial services to more than one million customers in Britain.
The Archbishop says: "It is great news that the Government has announced this funding for the Lifesavers pilot programme, enabling us to begin a programme of establishing savings clubs at church schools across the country.
"This project has the potential to help establish sensible, positive attitudes to money and the habit of saving in children and young people – habits we hope will stay with them for life. I am immensely grateful that HM Treasury has endorsed the Lifesavers approach by providing this invaluable practical support."
'The project will help to tackle the root cause of money problems'
Economic secretary Andrea Leadsom says: "A key part of our long-term economic plan is to secure peoples' financial futures. And at a time when young people are exposed to financial decisions earlier than ever, LifeSavers is a welcome initiative from the Church of England and the credit union movement. The project will help to tackle the root cause of money problems and develop good savings habits as early as possible.
"Credit unions provide an invaluable service to a growing number of members, many of whom are on lower incomes, and make a real difference to their communities. The Government wants to see British credit unions go from strength to strength, and I'm hoping the money we're announcing today is the kind of Christmas present the sector needs to ensure the next generation understand the benefits of saving with credit unions."