MOST teenagers are used to making regular withdrawals from the bank of mum and dad.
But these financially-savvy students have bucked that trend by becoming the first in the Capital to set up their own credit union at school.
The scheme is a response to the economic downturn and the rise in payday loan companies charging exorbitant interest rates which can reach more than 4000 per cent a year.
Run entirely by the students through the Edinburgh-based Capital Credit Union, it teaches pupils about money management, savings and the perils of borrowing. Third-year pupils Joe Glancy, Ben Gourlay, Mark McArthur and Ewan Philip spent months putting in the groundwork to develop the credit union. Volunteers man the desk in the school every Wednesday lunchtime allowing people to register and pay in money. If they want to withdraw money, the customer must ring Capital and transfer it to a bank account.
Mark, 14, who helps run the union, said: “It’s good for people to know that they can go and get loan if they need one and not end up in a massive amount of debt.”
Susan Stride, head of business and maths, said she hoped it would stand them in good stead for the future.
She said: “We hope to teach young people to save a little and often from a young age, promote thrift and to encourage young people to save for the future.
“The response we’ve had so far has been really positive and we’ve had quite a lot of students and staff signing up.
“It will give the school community the opportunity to have a relationship with an ethical local financial services provider and a better understanding of money management, saving, budgeting and responsible, affordable borrowing.”
The idea was originally offered to schools as part of a financial education week earlier this year.
Four high schools and two primary schools are in the process of setting up the accounts with Capital Credit Union, with Balerno the first. Balerno pupil Morgan Lacey, 14, said she signed up to stop herself spending all her money.
She said: “I think it’s a really good idea. I’ve signed up because I want to save as much as I can. My dad gave me £20 the other week and most of it’s gone already.
“If it’s in an account, I’m less likely to spend it.”
Education convener Councillor Paul Godzik praised the scheme.
“Giving the pupils ownership of the project means they can take great pride in encouraging a sound savings habit in their local community and develop financial awareness.
“It also ticks all the boxes from a Curriculum for Excellence viewpoint as it’s putting into practice aspects of numeracy, literacy, finance and health and wellbeing.”
Youth debt doubles since 2004
THE first school credit union in the Capital opened the same week as the Financial Conduct Authority announced plans to regulate the payday loans industry.
It is supported by Citizens Advice Scotland which states debt in 16 to 24-year-olds is increasing at twice the rate of other clients. It said the average level of debt for young people has nearly doubled since 2004.
The average number of debts for young people in the survey stood at six, the same number that older clients held.
Young people were more likely to want to go bankrupt than other age groups, but most could not afford the fee.
Half of young people attributed their debt problems to money mismanagement, while around four in ten thought that low income, having children and losing work were key factors.