Call to help kids open bank accounts

Simon Culhane of Securities & Investment Institute. Picture: Contributed
Simon Culhane of Securities & Investment Institute. Picture: Contributed
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A CITY examinations and ethics body is lobbying the banking industry and government to sharply drive up the number of 16-year-olds with bank accounts.

The Chartered Institute for Securities & Investment (CISI) has proposed that children should be able to open a bank account using their national insurance number, which is given to them aged 15, as a form of identification.

Simon Culhane, chief executive of the CISI, said he has received “encouraging” backing for the plan from English education minister Elizabeth Truss and the British Bankers’ Association.

Culhane said that, at a recent meeting, Truss was “100 per cent supportive of the concept, particularly as she could see a good fit with the recent announcement that financial literacy would be on the [English] school curriculum from September 2014”.

Studies suggest only 20 per cent of 16-year-olds have a current account, although no official figures are available.

Under the CISI’s plan, 15-year-olds would have their national insurance letter from HM Revenue & Customs validated by a senior person at their school, and take it along to their chosen bank branch.

Much of the anti-money laundering and basic account information would already have been filled in by the tax authorities.

The plan is being studied by David Gauke, Exchequer secretary to the Treasury, with a decision expected shortly.

“The CISI’s remit is more than just the City,” Culhane said. “This proposal would reduce social exclusion, particularly for the less-advantaged children. It would also make their curriculum lessons in finance from 2014 much more relevant to them because they would have a direct stake in the whole subject.”

The body said these accounts would only be used for saving or money transmission because children cannot borrow or enter into legal contracts until they turn 18.

“The UK government has talked about the Big Society, where society comes up with solutions to problems and the government enables the solution. This is a prime example of that,” Culhane added.