Starter for £10 - city kids cash in with savings advice

THE first Glasgow pupils today signed up to a scheme aimed at keeping them out of the clutches of payday lenders.

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Lochend High pupils Callum Bonner and Kaylin Ross have signed up to the scheme
Lochend High pupils Callum Bonner and Kaylin Ross have signed up to the scheme

City council bosses have decided to offer all youngsters in the first year of secondary school the chance to open a credit union account.

Those who do will have £10 deposited in the account by the local authority.

As credit union members they will eventually be able to access a responsible savings scheme, a low interest option for loans as well as money advice.

Already 1000 of the city's 4000 S1 pupils have said they want to join the scheme, the first of its kind in the UK.

'Glasgow's Starter for Ten' has been launched in the hope borrowers of the future will turn to credit unions rather than payday lenders which charge high interest rates.

City Treasurer Paul Rooney visited Lochend Community High School in Easterhouse to meet the first youngsters to open Future Savers accounts.

They will be available to all S1 pupils in the years to come, meaning every young person in the city will eventually have the option of a credit union account.

Mr Rooney said: "What we want to do with this project is give every young Glaswegian a safe and secure relationship with a credit union.

"Straight away, they will have to learn about managing money and will have the opportunity to save.

"And if, years from now, they decide they need to borrow, they will also have access to a lender that knows them well and will help them rather than simply see them as an opportunity to turn a profit."

Research carried out by the council last year suggests 100,000 Glasgow residents are regularly using non-standard forms of credit, like payday lenders, fuelling a city market worth more than £57 million a year.

A cross party group set up to investigate the extent and impact of payday loans in the city has proposed a range of actions for all levels of government.

The council has already vowed not to lease any of its commercial property to payday lenders and is working with the £13billion Strathclyde Pension Fund to ensure no direct investments are made in the trade.

Councillors are also lobbying Westminster and Holyrood to reform how lenders are allowed to operate and to give local authorities greater planning powers to prevent high-cost lenders swamping local high streets and town centres.

The council has already blocked computers on its public networks from accessing payday loan websites and has successfully encouraged some of the city's biggest employers and institutions to do the same.

At the same time, it is offering credit unions in the city rent subsidies and rates relief.

Glasgow is the country's credit union capital, with one in every six UK accounts held in the city.

Mr Rooney said: "It is clear many people who use a series of short, expensive loans actually need longer-term credit but often perceive it to be quicker and easier to get money from payday lenders.

"However, if someone already has a relationship with a credit union it can respond quickly and offer affordable, sustainable finance when it is needed.

"Just as importantly, it can also help them to save and manage their money well in the long term, which payday lenders are not interested in."

vivienne.nicoll@eveningtimes.co.uk

Finance

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