MyPocketSkill mission is to hep Gen Zs to become more financially capable. We do so by enabling them to earn, save and learn about money. So it is good to know that as of September 2020 those turning 18 are now able to access their Child Trust Funds. Let us tell you what they are.
The Child Trust Funds were set up in 2005 and children born between September 2002 and January 2011 were eligible. These funds, now defunct, were replaced with Junior ISA’s in 2011 but the accounts remained open and active and happily their values have increased.
Now that many beneficiaries of the Child Trust Funds are turning 18, it bears the obvious question for teens: what shall we spend the money on? However for us, with financial capabilities hat on, it goes beyond just the spending question. For the young people beginning to receive these payments the question is also what financial skills and knowledge do they have to understand their options for these payments? What conversations can parents have to foster good financial habits and planning for the future?
Financial education was first introduced into the national curriculum 6 years ago in September 2014, in recognition that the ability to manage money well is an essential life-skill for young people. However in 2019, just 8% of young people said they learned about money skills in school and 17% said they were self-taught. As well as this, 82% of young people said they wanted to learn more about finance and money. So what can be done?
Research says that financial education is at its best when delivered at relevant time and in practical learning-by-doing way. The Child Trust Fund payments are a perfect opportunity to have some a conversations with young people about financial wellbeing. Research, plan and implement some strategies to make sure they get the most out of the payments. Discuss investment and how it works, how the lessons they learn with this money can be applied to financial decisions for their future.
In today’s challenging circumstances, spending time equipping young people with these tools of financial skills is more essential than ever for the future.