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Our children will live in a cashless world, but they still need to know about finance, says Simon Bain
"Today's children will live in a completely cashless world," claims clinical child psychologist Dr Elizabeth Kilbey. "They must be given the tools to engage with money to help them learn in a way that works for them, through doing."
She was commenting on the recent launch of "pocket money for a digital age" (PKTMNY), which offers children a contactless, prepaid Visa debit card. Parents can personalise it for their child by setting controls on where and how much they can spend. The card is linked to an online platform, featuring interactive age-appropriate tools aimed at making managing, saving and spending money fun and engaging for children.
The programme was tested in conjunction with BritMums, the UK's largest parent blogging network. Founder Mark Timbrell says: "As a parent, I know just how difficult it is to teach children about money, especially as the school curriculum focuses on using cash and visiting banks, neither of which reflect how they see money being used."
Ofcom data shows 91% of children aged five to 15 in the UK have access to the internet and, according to Future Foundation research, the main reason seven to 11-year-olds go online is homework. Research for PKTMNY found children have "overwhelmingly positive associations with money".
In contrast, only 27% of parents felt happy when asked about money, with 21% saying they felt "instantly unhappy when someone says the word money".
Kilbey says: "There is a striking difference between how an eight to nine-year-old thinks about money and those aged 12 and older. Starting secondary school begins the process of learning the importance of having money, and being able to buy the things you want."
Parents, however, should note that the platform includes a PKTMNY shop which "offers families access to carefully selected, age-appropriate retailers including The Entertainer, Superdry, Hamleys, New Look, Zavvi and more". It also promises Android and iOS apps, to enable parents to top up their children's account and allow them to view their balance while on the go.
Also launched in recent months has been the Visa Prepaid CitizenCard, the UK's first combined ID and debit card for young people aged 12 and over, with parental consent for under-16s. The £15 card has PASS (police recommended) certified photo ID/proof of age, and claims to offer a range of benefits and rewards. Its 16-digit number begins with a 1 (for under-18s) rather than a 2, which blocks users from buying alcohol – as well as gambling, car hire, pawn shops, escort and massage services – helping address a verification problem for retailers. For under-15s, parents can also view their child's account and statements.
CitizenCard says: "It can be topped up by Bacs which is ideal for parents with children living away from home but still getting an allowance, or as an emergency card for those on a night out. It also provides peace of mind for parents of gap-year travellers as it is fully functional overseas, but is not attached to a bank account if lost or stolen. It is PIN-protected and can be used for domestic travel or as proof of age on public transport."
It stresses that the cards allow users to get cash back at retailers with no charge, "preventing them having to walk to cash points without friends". However, withdrawing cash from an ATM will cost £1 a time, and as well as the convenience of being able to "buy cinema tickets online" the card dangles the invitation of "discounts in a number of shops". There is also a cash incentive to introduce the card to friends.
Parents themselves may want to get more switched on to digital money. For smartphones, there are basic apps such as MoneyManager for Android (free) and iExpenseIt for iPhone/iPod (£2.99), which both track your spending habits and help with budgeting. There are also contactless debit cards, which allow you to spend up to £20 without tapping in a PIN number, like the Oyster card on London Transport. Banks also offer a range of "money on the go" services, including Barclays Pingit (also for non-Barclays customers) which enables money to be sent and received by smartphone, using a PIN number linked to an account.
Meanwhile, although there is a raft of money education initiatives backed by banks and charities in Scotland, it has yet to become embedded in the curriculum.
The UK-wide Personal Finance Education Group (PFEG) which had its Government funding cut two years ago, wants the new industry-funded Money Advice Service (MAS) to set its sights on a lower age group. MAS, under heavy political fire for the effectiveness of its £87 million budget, has yet to focus any of it on schools. PFEG chief executive Tracey Bleakley wants MAS to outsource a five-year programme worth up to £10 million a year on school money education, saying: "Its remit starts at 16 but we believe financial education needs to start in schools at four."
NEIL Connon sees the launch of PKTMNY as a promising solution to the cash needs of sons Harry, nine, and Frankie, 12. He says it can be easy to overlook doling out the right amount of cash at the right time, or asking for it, turning pocket money into a problem.
"It will be a controlled way of doing it, and once they move up to secondary they will need money for lunch, and need to start budgeting," says Connon, a senior computing lecturer at Robert Gordon University in Aberdeen.
"In terms of trying to educate them in the use of money, it makes a lot of sense."
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