Pocket Money, Savings & Allowances

  • FosterWiki
  • Author:FosterWiki
  • Published:March 2023
  • Country: United Kingdom

Pocket Money, Savings & Allowances

Pocket Money, Savings & Allowances

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:

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

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:

Personal allowance

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.

Bank Accounts

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

FosterWiki recommends

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:

  1. 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).
  2. 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.
  3. The need for all savings to be tracked and checks that each carer is paying in sufficiently from the allowance.
  4. 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?
  5. 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:

Foster carers comments

This is what our FosterWiki disability specialist has to say:

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.

Useful Links

Take a look at the New foster carers toolkit for more useful information about fostering and your role as a foster carer.

Allowances Bank Accounts ISAs Personal allowance Pocket Money Savings
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