Pocket Money and Savings for Looked After Children

Having pocket money is good for children and young people. It gives them a sense of independence and develops their skills in deciding what to buy and what it costs. Receiving pocket money helps children and young people understand the value of money and can develop budgeting skills essential for independent life. Pocket money is regularly received by children in families all over the country and having pocket money increases the normalisation of looked after children, and helps decrease their sense of difference from other children.

However, pocket money can be a contentious issue for foster carers, and it is consistently noted by looked after children as one of the most significant difficult issues about being looked after. More specifically, looked after children and young people complain about whether they actually receive pocket money, the amounts of pocket money they receive, and the consistency with which they receive it.

The child or young person's fostering allowance that is paid to foster carers is intended to cover the maintenance costs of looking after a child or young person. There is a 'personal expenses' element within this allowance and this is intended to cover pocket money, savings and other personal expenses for children and young people in foster care. Foster carers are therefore reminded that looked after children and young people must receive pocket money and savings whilst they are in their care, because part of their allowance accounts for this. Pocket money should be given to children and young people for their own use and not to pay for regular entertainment, clothes or personal toiletries, unless this has been agreed as part of the placement plan, please see examples below.

Furthermore, looked after children and young people are often aware that part of the allowance paid to their foster carers includes pocket money that is meant to be given to them, and therefore withholding pocket money can cause significant conflict within the foster home. However, sometimes it will be appropriate to withhold pocket money for a short period which should be appropriate to the misdemeanour. This should usually be for a short period of time for example a few hours but up to a maximum of four days. It can also be appropriate to confiscate up to two thirds of a child's pocket in a single weekly episode for reparation.

Carers are expected to encourage older children and young people to open a personal savings account to help them manage their pocket money and other money given directly to them for birthdays and festivals. It would assist them in saving for items they wish to buy.

There should be flexibility about how pocket money is paid and be compatible with other children living in the home, the age and capacity of the child must be taken into account.

Foster carers must ensure that when providing any money to a child or young person that they record the date and the amount of money given. Foster carers must also ensure they record all expenditure on clothing and all money put aside as savings. This is so that carers have a clear record of direct expenditure on a child or young person. Family life is full of expenses and Foster carers should not feel that they must account for every penny they spend. However, we do remind foster carers that the allowance they receive covers clothing and personal allowances for children and young people, it is important therefore that an accurate record is kept of money given directly to children and where clothing purchases have been made.

Primary school aged children would be expected to be paid their pocket money weekly, preferably on a set day. Older children may prefer to receive their pocket money and any other allowances given to them for personal toiletries and entertainment, monthly and paid into their personal savings account. This will depend on their maturity and should be discussed with them and their social worker.

The amount of pocket money must be clarified at the start of a placement and discussed at the placement agreement meeting. The amount arrived at must be compatible with the foster carers' birth children still living in the home and other foster children. The amount of pocket money paid to close personal friends can also be considered if it is appropriate. Although we have suggested the minimum amounts for each age, setting the appropriate level should be regularly reviewed with the child's social worker and the carers' supervising social worker and should be clearly laid out in the placement plan. If the child or young person is dissatisfied with the amount he or she is allocated it should be made clear how they can raise this issue and with whom. Some examples where the amount of pocket money given will vary are as follows;

1. If a teenage girl is expected to purchase her own toiletries and beauty products then she will need to receive more pocket money than if the foster carer purchases all toiletries and beauty products for the household as part of a weekly household shop;
2. If a young person is expected to purchase their own top up cards in order to make personal calls from a mobile phone, then they will need to receive more money than if they were able to use the home landline;
3. If a young child is not expected to purchase their own sweets or comics, then they will need to receive less pocket money than if they had to purchase their own weekly treats.

The message to foster carers is:

The more you use the child or young person's allowance to directly cover the costs of their personal expenses (i.e. covering the costs through general household expenditure) then you will need to give the child or young person less pocket money. On the other hand, if you expect the child or young person to cover most or all of their own personal expenses, then you will need to give them more pocket money to reflect this.

There can be an expectation that some contribution to family living be given by the child or young person in exchange for their pocket money. This is particularly important in long term placements where the child will be living as a child of the family. The minimum amounts for pocket money and reward element are shown below. The expectation is that chores or tasks are realistic and achievable to enable children and young people to receive the total amount of recommended pocket money. This will need to be discussed with the foster carers' supervising social worker and the child's social worker.

Where there are concerns that it may be risky for a child or young person to have their pocket money in their hand to spend alone they can be accompanied by a carer to spend their pocket money. This should be agreed with the foster carers supervising social worker and the child's social worker and clearly recorded.

The rate of pocket money paid to young people should be realistic so that a smoother transition to independent living is made. A young person needs to develop budgeting skills as early as possible and the ability to live within the allowances paid to them when they become independent. This process should start in early adolescence so that false expectations of how far money will go are not built up. The rate of pocket money and other allowances paid to encourage independent living must be discussed with the young person's social worker and the foster carers' supervising social worker.

If a child or young person has to spend time in a respite care there is an expectation that the respite carer will pay the child or young person's pocket money. If the amount is paid monthly into a savings account for a young person then some discussion will need to occur as to who is responsible for payment or part payment.

It is not expected that pocket money is paid to children under the age of five. They can have occasional treats instead of pocket money. The table below is a guide to the minimum amounts each child or young person should receive.  It is recommended that an increase in pocket money is linked to the child or young person's birthday to mark their increasing age. The incremental changes increase after the age of 10 to take account of the child's increasing maturity.

Most families put aside a sum of money on a regular basis for their children's future. Children in the care of the local authority would also benefit from money set aside for them, to enable them to start independent living with some savings.

It is expected that foster carers set aside, in a separate savings account from the child's personal savings account, and in the child or young person's name, the sum of £5 per week for each child 0-5 years old, £6 per week for a child over 6-10 years old, £8 per week per child 11-15 years and £10 per week per child for a 16-17 years from their child's allowance. This will apply to all foster carers whether short term, long term or respite. The savings for the child or young person must accompany the child on their move to different carers within the care system. The Authority expects IFA foster carers as well as our own carers to save for each child or young person.

If a child or young person goes into respite care some agreement should be reached by the foster carer, respite carer and their supervising social workers as to whom should be responsible for paying the savings for the child during the period of respite care. This money is for the child's future and any use of the money before they leave the care system must be discussed with the foster carers' supervising social worker and the child or young person's social worker.