youthmoney

A main charge against Alistair Darling’s pre-election budget is that it lacked detail and clarity.

That’s certainly true of the one new initiative that could help young people manage their finances – the proposal to introduce a new right to open a basic bank account.

What hoops will a young adult have to jump through to get the account? What documents will they need? What documents will a bank be able to refuse? Evidence of an address will be required. But what sort of accommodation will be accepted. Is a hostel an address?

The search for answers, or even hints of answers, doesn’t get very far. The budget document says only this:

The Government intends to introduce a new ‘universal service obligation’, giving people the right to a basic bank account under certain conditions and will consult on the details.

Those details are crucial for young people. They will determine how many currently financially excluded young people will be able to move out of a cash-only economy onto the first and necessary step of managing money. If the bar is set too high, the proposal could turn out retrograde – and give banks a reason for refusing an account which today they might have approved.

Worth watching out for the consultation.