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Digital bank Monzo has unveiled plans to launch a new account for children aged under 16, which will let youngsters set savings goals and organise money with “pots”.
The account, which will come with a brightly-coloured Monzo card in pink, yellow or blue, will include in-app guidance for children on money topics.
The account, which has no fees for signing up, topping up, subscriptions or spending abroad, can be held by children aged six to 15 years old.
TS Anil, chief executive of the bank, said some “Monzo favourites” are included with the account, with tools for children to customise their app and cards to choose from.
It will give children their first taste of saving and budgeting, as well as receiving scheduled pocket money payments and using a card to pay in a shop, while giving parents or guardians control and visibility to ensure children are managing their money safely, the bank said.
Parents will have the child’s account linked to their own, and can choose to be notified when their child spends. Parents can set spending limits and use controls to turn cash withdrawals and online payments on or off.
Children can “graduate” to an account for 16 and 17-year-olds and again to a full Monzo account when they become an adult, the bank said.
Parents or guardians can join a waitlist for the new account, with the first customers getting access later this summer and the product being rolled out over the months ahead.
It is understood that Monzo will be exploring potential options for interest on savings as it expands and develops its under-16s account.
A OnePoll survey for Monzo among 2,000 parents indicated that more than seven in 10 wish that they had been taught about money management at a younger age.
Of the parents who discuss finances with their children, half (50%) said they want their children to understand how to save pocket money, with just over two-fifths (42%) saying they want their children to understand how to create a budget.
Digital apps and accounts that provide real-time balances and teach money management skills are a great asset to enhance any financial education— Rachel Springall, Moneyfactscompare.co.uk
Rachel Springall, a finance expert at Moneyfactscompare.co.uk said: “It’s great to see more competition in the market to encourage the savings habit and for under-16s to learn how to manage their own money.
“Budgeting and saving for a rainy day is a life skill which might not come naturally to some or indeed passed down, so getting into such a routine might seem a hassle.
“This is why digital apps and accounts that provide real-time balances and teach money management skills are a great asset to enhance any financial education.
“Parental access is also essential to ensure their children are spending safely, and it’s good to see this Monzo account allows them to quickly turn off cash withdrawals or online payments.”
Ms Springall said that account providers do not always offer products for children as young as six.
She said some accounts, including those from Starling Bank, Rooster Money, HyperJar and GoHenry are aimed at children as young as six years old.
