PLYMOUTH, U.K.—More than 6,000 school children here are being given £10 each that they can use to open a savings account with either of the two credit unions in this city. The funding is coming from the Plymouth city Council as part of an initiative called “Starter-4-Ten.” The council said the aim is to promote alternative sources of lending to the high profile – and high interest rate – payday lenders, which has been an initiative of credit unions across the United Kingdom.
The Plymouth Herald reported that under the program, all eligible year seven students, estimated at approximately 2,500, will be able to open an account with a Plymouth City Council £10 voucher to open the savings plan. Children who have been able to manage their account and how have at least £10 in the account after 12 months will be given a further £10 to invest.
The plan will link up with a Year 11 scheme involving around 3,500 students who are also being the opportunity to open a credit union savings account with £10 voucher from the council.
The Herald quoted Councillor Mark Lowry as saying Plymouth already had good credit unions in the city and that students in the Starter-4-Ten initiative will be given presentations by from council staff and staff from Barclays Bank, who have assisted with the initiative.
The training sessions will focus on budgeting, saving, borrowing, avoiding scams and how to use basic bank accounts.
Councillor Chris Penberthy remarked that many young people who get their first paycheck after leaving school are being “targeted” by the payday loaners. It is estimated that 30% of the population of Plymouth are currently in debt to payday lenders.