Pocket Money, Savings & Allowances
Pocket Money, Savings & Allowances
“When we did the research for this page the disparities across different providers on the amount of pocket money, savings, allowances, policies and how these were implemented were vast, they even varied within providers.
The pocket money, allowances and eventual savings for those leaving care may seem like a bit of a postcode lottery and there is inadequate information or guidance for foster carers. We hope this guide will empower foster carers to ensure they get the correct policies and information they need.”
Sarah Anderson, Founder, FosterWiki
Introduction to Pocket Money, Savings & Allowances
Like many things pocket money, allowances, savings and policies vary from provider to provider due to the devolved nature of foster care.
This guide is designed to give foster carers information on how it works, with tips and guidance from experts in foster care and includes foster carers’ comments from around the UK to illustrate how it works in practice.
What the National Minimum Standards (NMS), the guidance underpinning fostering:
2.5 Children exercise choice and independence in the clothes and personal requisites that they buy and have these needs met, within the context of the foster family’s decision-making and the reasonable limits that a responsible parent would set.
2.7 Children receive a personal allowance appropriate to their age and understanding, that is consistent with their placement plan.
Children are supported to develop financial capability, knowledge and skills.
As you can see there is no consistent standardised national policy for looked-after children’s pocket money, allowances and savings, it is very much left to each fostering provider.
Our role as foster carers is to contribute to the education of our children and young people on how to budget, manage their money and save, this is essential for their futures.
Pocket money, allowances and savings, unless otherwise specified come out of the child’s allowance element paid to the foster carer.
How does it work?
Every fostering service should have a policy on pocket money, allowances and savings, if you have not got one ask your supervising social worker (link worker) for it.
Your fostering services should provide you with their policies on pocket money, allowances and savings, this should also be discussed in care plans, placement plans, supervision and with children’s social workers.
Don’t do anything off your own bat make sure you work with the team, follow policies, and care plans, get things in writing and always follow National Minimum Standards.
Pocket money is exactly what it says, and the child or young person should be allowed to use this in the way they chose, they should also be clear about how much it is (age appropriate) and when and how they receive it.
However, as foster carers, it is part of our role to educate our children and young people about basic budgeting skills and savings.
Your fostering services should provide you with their pocket money policy and this should also be discussed in care plans, placement plans and supervision.
The policy will often be accompanied by a chart like the one below, although amounts will vary from provider to provider.
Some policies include the possibility of earning extra money for doing chores or as an incentive or reward for things like tidying their rooms or doing well at school, however, this is something you must ensure is approved by your provider and that approval is recorded in writing.
Withholding pocket money for any reason varies in policies across fostering services, check your service policy, and if you are withholding pocket money for any reason and it is within the policy remit it is also a good idea to put it in writing to your and the child’s social worker for them to agree (in writing) to you.
If the child has their pocket money in cash then provide them with a cash box or piggy bank.
An experienced member of the FosterWiki team says this:
In fact, we now have the conversation when they first join our family, and we expand that their pocket money/allowance goes into their bank every Friday morning and we won’t give them any advances or loans, this is simply because if you do it once you will set a precedence and cause issues if you then refuse the next time.
It’s an important part of our role to help them learn to budget and save so we don’t do it, but clarity and sticking to it are important. Of course, we give them money for special occasions, birthdays and maybe some extra things but we are very specific about what it is for.”
However, it is really important you discuss this with the child and your social worker and have a written agreement to this. If this isn’t possible then have a conversation with your own children as to why the foster child is getting more money than them, so they understand, that discussion can be framed in many ways.
Once a child turns 16yrs they will go from pocket money to an ‘Allowance’, this is to cover things like mobile credit, personal toiletries, activities or going out. They could also be used to save for larger items like a phone, trip or holiday spending.
Allowances are part of acquiring the skills they need as they move towards independence, and again our role is to educate and help them with budgeting and financial skills.
The expectations on what they are to fund with their allowance should be agreed upon in Placement Planning Meetings and Reviews.
All children in care should have a bank account, again, refer to your fostering services policies and guidance on this subject on how to set this up and how it works.
Generally, the foster carer opens the account for the younger children, and once young people get to 16yrs they can open their own bank accounts, or take over control of their own accounts.
This will vary between banks and fostering services so again make sure you are aware of the policies.
With pocket money foster carers encourage and educate children to budget and save for things, the accounts for savings are separate.
Foster carers can be trustees of the bank account, but this must be approved (probably at the Placement Planning meeting), but it depends on the delegated authority and whether the birth parents are involved in the decision-making process.
Opening a bank account – what you will need
- Proof of identity – This can often be challenging as there is not always a passport or birth certificate. It is the role of the Child’s Social Worker to obtain these.
- Proof that a child lives at your address – This can be in the form of a letter from the local authority to confirm that this is a looked-after child in foster care at your address.
- If you have difficulties the banks often have a ‘non-standard’ case referral system and the staff at the bank should be able to tell you how to contact them for help.
Child Trust Funds and Junior ISAs
Every looked-after child will have either a Child Trust Fund (CTF) or a Junior ISA account which is government supported, and into which more savings can be added.
Foster carers will pay an amount (set by your fostering provider) into this account on a monthly basis.
Foster carers will become the ‘registered contact’ for this account and manage it and when children and young people move their savings need to move with them and the registered contact moved to the new carer.
The £200 paid in by the government to the Junior ISA cannot be accessed by the child until they are 18yrs, but the registered keeper only manages the account until the child reaches 16yrs.
It is the foster carer’s duty to ensure that their child or young person has one of these savings accounts and that further funds are paid into it according to policy.
It is the duty of the local authority to identify those children and young people who when entering care do not have a CFT. The local authority should clearly set out their policies for savings for looked-after children.
Check out your local authority or agency’s policies as you may have another separate savings account that you pay into. The policies seem to vary, there seems to be no standardised procedure even if one exists.
Government link on savings accounts for looked-after children https://www.gov.uk/government/publications/junior-individual-saving-accounts-for-looked-after-children/junior-individual-saving-accounts-for-looked-after-children
From the feedback, we have had from mainstream foster carers around the UK, we make the following recommendations:
We recommend that the Local Authorities should manage the savings at source, this would alleviate:
- The difficulties foster carers have in opening savings accounts, and the challenges in paperwork, home addresses and bank issues with carers opening accounts for children that are not theirs, and for UAAS children with a lack of status and ID. It is also challenging as foster carers never have parental responsibility (PR).
- The complexities that arise when children move placements, savings accounts not being passed on, another change of account, social workers not being allowed to accept cash or cheques from foster carers.
- The need for all savings to be tracked and checks that each carer is paying in sufficiently from the allowance.
- Perhaps deduct the savings from the allowance at source, if the carers have to pay it anyway why isn’t it deducted and placed straight into an account held for the child by the local authority, who are their corporate parent?
- Too many savings go astray or don’t get paid in and children and young people do not get them on leaving care.
Brighton & Hove
This council is an example of what we see as best practice in this area, it is best for the foster carer but more importantly best for the children and young people.
This is from Brighton and Hove’s savings policy:
These accounts were in the name of the child and not accessible by the child, social worker or foster carer to withdraw money. Some difficulties arose with this method around the opening of these accounts with the paperwork available or the delays that they have in receiving this information, as well as finding banks that would allow this.
Opening accounts for some young people can be more difficult than others such as Unaccompanied Asylum Seeking Children due to their status and lack of valid ID. This can be made more complex when a young person moved quickly or frequently as savings can at times get forgotten.
Also supervising social workers and social workers should not accept cash/cheques from any carers and there needs to ensure all monies are clearly tracked if there are any queries e.g. via BACS.
The local authority wanted to make this process simpler and remove any potential risks of money going astray or being spent prior to the young person turning 18. Therefore a plan for the Local Authority to manage the saving ‘at source’ for each young person was developed.
It was felt that savings for children and young people placed in-house should be universal and that £5 per week (£0.83 per day) should be saved for each young person no matter what their age or how long they are placed in foster care.
Carers will not have the responsibility to make long-term savings, benefits of this are:
- Carers do not need to open a long-term savings account.
- Do not need to account for these or pass details on to new carers when children move.
- Do not provide details of these to supervising social workers or children’s social workers.
- Savings are made automatically by the payments team from the weekly allowance before the carer receives this.
- All savings are recorded and can be tracked.
- All young people placed with in-house carers receive the same amount each week from the point that they are placed in care.
Foster carers comments
“I have to give child £10 per week per child at every age. I am not allowed to withhold this money for any reason. I usually do bank transfers.”
This is what our FosterWiki disability specialist has to say:
However some children depending on their learning needs may not recognise the value of money, so they would need the foster carer to help them buy things they might like always encouraged to choose to purchase and pay for themselves. They may need help understanding they only have so much money or what to choose.
Always have a contactless debit card and have online banking so you look together and can get them involved in their own banking habits for when they may be more independent to manage finances.
Disabled children like to shop online or gaming and are easy targets for financial abuse online. Also can be too trusting of others especially peers who may want them to spend their money on them.
The foster carer will usually keep the Card in a wallet /purse safe for the child for when they want to spend their money. Savings would also be part of this scrutiny and paid into their account.
Pocket money should be discussed from the point of a child coming to live with you and discuss the best way to provide the people you work for with evidence so you don’t find yourself in an allegation of financial abuse.
Pocket money or any other awarded to them belongs to the child and you are just supporting them.”
As always speak to your fostering provider, get their policies and work with your own and the child’s or young people’s social worker.
Take a look at the New foster carers toolkit for more useful information about fostering and your role as a foster carer.
Information, Help and Support
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