Supporting Young People with Money Management and Budgeting

Some young people are able to manage their own finances and bank accounts with minimal support. However for some, a level of support is needed from you as the host to develop money management skills.

These options may be:

1. The local authority/young person’s social worker could  provide a weekly allowance to the Service to administer to the young person and to pay for the support they receive;
2. A Property and Financial Affairs Deputy. This  is a person or organisation appointed by the Court of Protection for managing money; claiming benefits; managing bank accounts and utilities; managing debt, tenancies and property;
   See also Deputies: Make Decisions for Someone Who Lacks Capacity (gov.uk).
3. An Appointee could be used. This could be a family member, previous foster carer etc. who is appointed by the Department for Work and Pensions (DWP) to be responsible for making and maintaining any benefit claims on behalf of a young person who lacks capacity around financial management.  

The Appointee role involves:

1. Claiming all DWP benefits that the young person may be entitled to;
2. Collecting all benefits into a bank account;
3. Reporting changes in circumstances; and
4. Managing and spending benefits in the Best Interests of a young person.

The Appointee could then provide money to the Service and/or the young person.

Note: An Appointee cannot decide about how to spend monies. Their role is limited to receiving benefits and ensuring the young person’s financial obligations are met. For Further details please see DWP information around Appointeeship.

It should be agreed with the young person’s social worker and your Supervising Worker what level of support is needed and any agreements should be recorded in the young person’s Care Plan.

The following areas should be looked at as part of a financial assessment of the young person’s needs:

• Young Person’s Income/Benefits and Allowances:
  • Sources of income – wage slips, tax & NI, benefits;
  • Benefit entitlements- Job Seekers allowance, Universal Credit and what the young person need to do to maintain these;
  • Allowance from the accommodating local authority – the amount, how it will be paid and how it will be managed, for example, by the young person or by the host and young person.
• Support with Banking: 
  • Does the young person have a bank account or does one need to be opened?
  • Who will open the account with the young person? Social worker, parent, host etc.;
  • What type of account is needed?, such as, a Student account, savings and/or current account, any controls attached to the account so the young person cannot go overdrawn?
  • Whose names will be on the bank account? the young person only or will it be a joint bank account?
  • What support the young person needs with banking? Understanding interest, forms of payment, understanding contracts, direct debts and how they work, such as, monthly mobile phone payments.
  • How will the bank account be monitored and what recording will be kept?
• Budgeting and Household Costs: 
  • The young person’s attitude towards money, needs and wants- it is useful to find out about the young person’s spending habits are and what support they need with this;
  • Any capacity issues, is a Mental Capacity Act assessment needed?
  • Are there any other difficulties that have to be taken into account, such as, dyscalculia?  
  • Recording issues, are you expected to keep records of financial spending and how will this be recorded?
  • How often will this be audited and by whom, for example, the Supervising Worker and/or young person’s social worker.

It is always best to start small and build on budgeting skills as financial management is a complex area and it takes time for any of us to develop these skills. Mistakes made now can help the young person learn for the future.

Ideas to Help with Budgeting

• Cooking from scratch and planning for meals;
• Shopping around for the best deals, such as, on monthly mobile phone deals;
• Keep birthdays and Christmas simple;
• Going to discount shops;
• Give second-hand a chance;
• Look at cheaper activities;
• Plan ahead for anything expensive such as holidays, bills etc.;
• Think about setting up monthly direct debits to spread costs over a period of time;
• The importance of saving.

 The young person should be supported in understanding the following;

• Forms of borrowing and not taking out loans for other people:
• Keeping financial matters secret and only sharing information with trusted individuals;
• The importance of credit history;
• Debt consequences and prioritisation;
• Staying safe with money, such as, avoiding loan sharks;
• Be aware of financial abuse and the aspects of control and coercion and so-called friends who financially abuse others;
• Not getting involved in money-muling (letting someone use your bank account to transfer money often keeping a bit for themselves – this is a criminal offence).

The young person should be supported toward independence so future support needs should be looked at such as how to manage a tenancy, paying utility bills, budgeting for food costs, how to get help when you are in debt should also be addressed.

When a young person turns18, they may be entitled to various welfare benefits and the social worker/personal assistant should look with the Service at who is going to support the young person with claiming these benefits and how their money should be managed. This should be considered well before the young person turns 18.

If a young person does not have capacity or there are safeguarding issues, a number of options can be used.

1. Corporate Appointeeship - Organisations can become the designated Appointee to a young person who is unable to manage their own finances. Corporate Appointees are local authorities, firms of solicitors or other advocate organisations such as Money Carers Foundation that provide an Appointeeship service when a family member or friend is unavailable or unsuitable.  All Corporate Appointees need to be approved by the Department for Work and Pensions;  
2. A Property and Financial Affairs Deputy.

All financial arrangements and agreements should be recorded in the Care Plan and monitored by the Service and the social worker/Personal Assistant.

If the young person has the capacity to make financial decisions, there does not need to be a record kept of their spending, unless they ask you as a host to do so or there are safeguarding concerns around the young person.

If the young person lacks the capacity to manage their larger finances such as bank accounts, all purchases made with your support must be recorded. If receipts are available, and the young person does not need to keep them they should be attached to records.

The record should include a starting balance (which should reflect the end balance of the previous record), details of the incoming or outgoing money and an end balance.

Hosts should sign and date each record.

Monitoring of financial records for anomalies should form part of the young person’s social worker’s/Supervising Worker’s role as part of quality assurance and monitoring processes. The larger amounts being handled by you as a host, the more scrutiny should be applied by the Service, to protect you as a host from allegations being made.

All financial irregularities should be reported to the registered person at the time they are noticed.

Recording processes should be sufficiently robust to allow a back-tracking of records in order to identify at which point the anomaly occurred, and what the potential reason for it was.

Unexplained financial discrepancies may warrant a safeguarding concern being raised.

Substantiated cases of dishonesty, theft or fraud could lead to an investigation and hosts involved can be deregistered and/or face possible criminal proceedings.

The young person should be encouraged and supported to store all bank statements, benefits letters or other financial documents securely.

Hosts MUST never:

• Use your own money to pay for the young person’s expenses unless agreed by the accommodating local authority, a record should be kept of this agreement;
• Carry the young person's money with you other than on the day of transaction;
• Borrow money from the young person;
• Lend the young person money unless agreed by the accommodating local authority and this information should be recorded;
• Use the young person’s belongings;
• Have access to the young person's PIN number, unless necessary and agreed by the young person (if they have capacity) or an Appointee or Deputy (if the young person is over the age of 18);
• Try to take on legal responsibilities for a young person’s finances e.g., Appointeeship or Deputy (if over the age of 18);
• Provide financial advice normally provided by a financial advisor e.g., around investments;
• Sign cheques or any official paperwork for or on a young person's behalf;
• Benefit from a young person’s lottery ticket win.

Money Helpers Website

Money Management Tool- Prince Trust

Financial education -Mybnk organisation

Making finance decisions for young people- parents and Carers- Gov UK

Turn to us – benefits available to young people