Bank Accounts, Loans and Interest

It may come as a surprise to parents that many UK banks give children a full bank account at the age of 11.  Some of the features of these may include:

  • debit card which can be used in shops and online
  • contactless payments – no PIN required under £20
  • internet, telephone and mobile banking

Generally these accounts don’t allow children to go overdrawn so they can’t get into debt but an 11 year old loose with a debit card can spend all their savings in a short space of time!

Most online retailers don’t allow under 18’s to set up an account – but the checks are limited.  Amazon state:

We do not sell products for purchase by children. We sell children’s products for purchase by adults. If you are under 18 you may only use with the involvement of a parent or guardian.

It is a good idea however to get your child used to using a bank account for the first time when they are young enough to still listen to your advice.  Go into the branch with them and talk through the options.  You’ll need to sign the forms anyway.  Discuss their statements with them and talk to them about the difference between debit and credit cards.


If your child is lucky enough to have some savings, talk to them about the best way of saving for the long term.  The website moneysavingexpert has some useful tips.


Child Trust Fund

Children born between September 2002 and January 2011 were given £500 tax free by the government in a Child Trust Fund account.  The UK Government website has useful information about this as well as the Junior ISA’s which can be used as tax free savings instead of this.


Visit the website


Compound Interest

More able pupils are expected to understand, and be able to calculate compound interest.  This is a way of working out how much you have to pay back on a loan depending upon the annual interest rate and the number of months to be paid back.

The website Maths Is Fun has an excellent worked example of compound interest.  The amounts are all in dollars but the principle is the same.


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