This text is the newest a part of the FT’s Monetary Literacy and Inclusion Marketing campaign

Overlook kilos, {dollars} and even bitcoin. There’s just one foreign money that my two-year-old niece at the moment understands — and it’s ache aux raisins.

Bribery is a key characteristic of “Auntie Claer care”. If she’s been good, she will get a deal with on the espresso store on our manner dwelling (her favorite half is unravelling the pastry and choosing out all of the raisins). And one other essential a part of this occasional ritual? She likes to pay for it herself.

Even at her tender age, my niece has labored out that tapping contactless playing cards on cost terminals is a medium of change. Naturally, she desires to be the one to faucet my card.

I’m all for giving youngsters early publicity to cash and funds, however what worries me is the invisibility of digital transactions versus the physicality of notes and cash. Do youngsters realise that precise cash is being spent, or suppose this “magic card” merely makes every little thing potential?

FT Flic

This text is a part of a sequence of items written for the brand new FT Flic charity which is able to develop instructional programmes to spice up the monetary literacy of these most in want.

Monetary literacy schooling offers younger folks the foundations for future prosperity — and will help economically deprived folks out of deprivation. Be part of the FT Flic marketing campaign to advertise monetary literacy within the UK and world wide

Donate to the Monetary Literacy & Inclusion Marketing campaign right here

Tapping away, it’s straightforward for adults to neglect we’re spending cash. I’m ashamed to confess I couldn’t let you know precisely how a lot a single ache aux raisins prices. I do know it’s round £2, however I at all times purchase a espresso too — and I not often ask for receipts for digital transactions.

Even when I gave my niece some cash to assist her be taught the worth of cash, there’s one other downside. Since Covid-19, loads of companies have gone cashless, and I purchase almost every little thing on-line.

Likewise, the piggy banks I purchased for her five-year-old twin brothers are gathering mud on the shelf. When my brother and I have been their age, we hoarded cash to purchase penny sweets within the native submit workplace. Right now, there are only a few locations (in central London, not less than) the place youngsters can spend small quantities of their very own cash.

All of this has obtained me serious about monetary literacy and the function that digital literacy performs inside this.

The way forward for finance is clearly digital — however youthful youngsters can’t discover ways to handle the hazards or alternatives in the event that they don’t have entry to digital instruments.

You need to be not less than 11 years outdated to open a present account on the nice majority of UK banks. Some limit contactless playing cards and on-line banking to over-13s or over-16s.

When you think about all the opposite issues a lot youthful youngsters are already doing on-line by then, these age limits appear more and more out of step.

Claer Barrett’s two-year-old niece will get to grips with a ache aux raisins — after having tapped Claer’s financial institution card to pay for it

But Stuart Haire, head of retail banking and wealth administration for HSBC UK, just lately advised me he will get far more requests from mother and father asking to disable the contactless characteristic on their youngster’s card somewhat than decrease the age restrict.

It’s comprehensible that folks need oversight. On-line banking palms younger folks the keys to a digital kingdom they might merely not be ready for. Equally, younger folks want a “secure house” by which to strive it out.

After I visited a faculty in Manchester this summer season, an alarmingly excessive variety of 14-year-olds mentioned that they had acquired requests to be a “cash mule” through social media platforms.

In addition they knew an terrible lot about crypto — as FT columnist-turned-teacher Lucy Kellaway has additionally discovered along with her college students — to not point out playing and “purchase now pay later”, despite the fact that it’s important to be over 18 (legally) to do any of those.

So how will we put together them? If mother and father are prepared and in a position to pay, there are an array of companies providing apps, and pre-paid contactless playing cards for youngsters as younger as six.

“That is the way in which youngsters are going to have to make use of cash as they transfer into maturity,” says Louise Hill, co-founder of GoHenry, by far the largest “pocket cash app” within the UK, with greater than 1.5m accounts.

For £2.99 monthly, mother and father can load a month-to-month allowance on to their youngster’s contactless card, see real-time notifications about what’s been spent, how a lot is left, and even limit the place they will spend the cash. (This might stop a future run on pains aux raisins within the Tooting space.)

“Youngsters want to have the ability to function confidently in immediately’s more and more cashless society,” she says. “In the event you’re not enabling these expertise at an early age, the chance is that they get launched into the grownup world of straightforward credit score and easy accessibility to funds, and find yourself in a nasty place.”

Linking grownup bank cards to youngsters’s on-line gaming accounts is one space the place many mother and father have come a cropper, as youngsters don’t know (or don’t care) that each one these in-app purchases will run up massive payments.

One other essential facet of digital literacy is with the ability to earn cash on-line. As a decide of the Nationwide Entrepreneur of the 12 months awards, Hill has been amazed at how teenagers become profitable with facet hustles, utilizing apps equivalent to Etsy, Vinted and Depop to promote their wares. Nonetheless, entry to digital cost platforms is normally restricted to over-18s, which means youngsters must piggyback on their mother and father’ accounts, or danger accounts being frozen if suppliers discover out they’re underneath 18.

“We’re speaking to quite a few these organisations about whether or not we might be extra tightly linked,” she says.

Mainstream banks are additionally beginning to get into this house. Starling provides a “Starling Kite” app and card for six to 16-year-olds, which is linked to a parental account, has full safety with the Monetary Companies Compensation Scheme and prices £2 monthly.

NatWest just lately acquired the fintech firm Rooster Cash, which provides the same service for £24.99 a 12 months, and can quickly be accessible through the NatWest app.

“The 7-11 age group is de facto essential from a monetary schooling perspective, but in addition for growing their very own independence round money,” says Alison Rose, the financial institution’s chief government.

Digital apps generally characteristic interactive quizzes, modules and video games to make studying about cash participating and enjoyable — excellent for an viewers glued to their smartphones. If younger folks can construct this functionality digitally, the probabilities are they’ll be higher ready for future monetary challenges that life might throw at them.

Whereas the price of apps, good units and broadband shouldn’t be one thing each household can afford, these are future monetary classes that each youngster must be taught.

That is the place the FT’s Monetary Literacy and Inclusion Marketing campaign is available in. I’m a trustee of the FT-backed charity, and certainly one of our key missions is to make sure monetary literacy is firmly embedded throughout the faculty curriculum so each youngster is ready for the digital monetary world.

FT Flic is working carefully with faculties and different charities to coach lecturers, and produce participating educating supplies for the classroom, and social media. You may learn extra at and make a web based donation if you happen to’d wish to assist this very important work.

Enhancing monetary schooling is likely one of the finest investments we are able to make for our youngsters’s future.

Claer Barrett is the FT’s shopper editor:; Twitter @Claerb; Instagram @Claerb

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