It’s the one with composer Edward Elgar on it. It looks like this

From the end of June 2010, the note will no longer be legal tender. That makes it much less likely that it will be accepted for payment in shops. The Bank of England says that for several months after the end of June most banks, building societies and Post Offices will accept the Elgar £20 notes for deposit to customer accounts and for other customer transactions. “However, agreeing to exchange notes is at the discretion of the individual institution.”

Anyone who is really stuck can always get an exchange direct from the Bank of England. Turn up on the doorstep of the old lady’s  gaff in Threadneedle Street, London. Or send a note by post (at your own risk) to Dept NEX, Bank of England, Threadneedle Street, London EC2R 8AH.

This is not smart. It’s better to get into the habit of checking that the gross pay is correct, especially if different hours and shifts are worked. Knowing that the correct tax code has been used, and questioning it if necessary, can save money too.

Young people in casual jobs need to know they have a right to payslip, and that warning bells should ring about any employer who pays cash in hand without a proper statement.

Knowing about the deductions – what tax and NI is for and where they go – is an important part of citizenship education. It’s also handy to get used to terms such as gross and net, which cause more confusion and uncertainty than they need to.

Direct gov has sound basic information. So does the site.org.

For a flash interactive internet guide, with a voice-over and clickable sections see lifetracks.

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.

Some personal finance journalists are helping to bring respectability to these high-cost lenders. Simon Read argued recently in the Independent that they provide a service to needy people. He refused to be horrified at payday loan companies charging APRs over 2,356 per cent, claiming that at least they are not as bad as violent, illegal lenders. Shaky ground that.

The Daily Mail’s Rosanna Spero had a different but equally false comparison to make. She found payday lenders charging over 3,000 per cent. But managed to make it look not so bad by comparing it with selected charges of unauthorised overdrafts from high street banks. This allowed the headline writer to claim “banks are the new loan sharks“.

There is very likely to be more of this misleading guff from the industry and its journalistic supporters. One internet-based lender, Payday Bank, is issuing press releases claiming that they are now mainstream and more trustworthy than high street banks.

Which makes it a good time to refresh some arguments about why payday lenders are not mainstream, in the sense of being a sensible option for everyday borrowing.

• If the debt rolls on, which is what will happen if the capital amount isn’t repaid as planned, it will be renewed each month and spiral quickly and disastrously.
• Short term expensive loans can be useful for a genuine emergency, provided you know and understand the charges and are sure of being able to clear the debt very quickly.
• There are other, much better alternatives for people on low incomes. Agreed overdrafts, credit union loans, social fund loans, and loans from friends are all worth checking out before considering payday lenders.

Young people need to know that a payday loan isn’t an everday, mainstream way of managing money. Considering it is a sign that they’re on the edge of losing control.

But there’s an important principle: if you are working, you should get paid. It’s a moral thing. Just because the young are capable of being exploited doesn’t mean that organisations should exploit them.

It’s also a legal thing. There are exclusions from the national minimum wage. Volunteers are among them. So are work experience placements – for a couple of weeks or so.

Internships can fall inside or outside the minimum wage system. A key legal distinction for an unpaid role is that nothing must be expected of the intern. They cannot be under an obligation to turn up on certain days of the week or for certain hours, to do any particular work or provide any particular service. If they are, then this is a job of work, not an internship. And is covered by national minimum wage.

You don’t have to look hard to find widespread and flagrant breaching of these laws. They are rife and increasing in the media industry, as media blogger Sally Whittle noted. Here are just a few examples culled today from the Gorkana PR job list:

Sport.co.uk, Content writers – Unpaid….

London-based Sport.co.uk, is offering a number of exciting opportunities to young and aspiring journalists looking to gain work experience and build their byline credits. Applicants have the choice of work experience in the office, writing on a freelance basis from home, or a combination of both. Opportunities to interview stars of the sports world, the chance to produce features, blogs and news articles and partake in the sport.co.uk team’s commissioning process will all be made available.

Mizz, Unpaid Feature Writers….

Mizz are currently looking for unpaid contributors to write features for the magazine – if you are looking for features or a byline please contact lsaxton@panini.co.uk

Resource Media, Editorial Assistant – Unpaid…

Resource Media is a social enterprise based in the centre of Bristol that specialises in publishing periodicals for the UK’s environmental industries (www.resource.uk.com).

Are you looking to break into magazine publishing? We require a part-time, volunteer editorial assistant to work on our environmental publications. You are likely to be educated to degree level, have an eye for detail and some experience in journalism or the publishing industry. Duties include copy chasing, research, writing, proofreading, website editing and design.

These look, sound, smell, walk and quack like unpaid jobs. And that’s illegal.

It’s not just struggling media companies. Respected charity Oxfam seems to be having difficulty understanding the law. Here’s this.

Information Management Assistant for Digitisation and Repository Project

Location: Oxford- Oxfam House

Commitment: Minimum three days a week for up to six months: ideally full time for up to six months…

Key Responsibilities:

Create an updated listing of books for digitisation, checking on existing digital files for quality, and preparing metadata for all products. Source printed copies where needed.

Create an updated listing of policy and research papers for digitisation either from print or from existing files, and prepare metadata and provide copy for replacement title and copyright pages.

Work with the Oxford-based sales office of the Chennai-based digitiser to deliver materials for digitisation, check quality and receive back final digital files before submitting them to the Google BookSearch programme

Review and where necessary rewrite product descriptions for the repository to high level SEO (search engine optimisation) standards. Check descriptions are suitable for external audiences (remove Oxfam jargon)

Work with the Research Team on research reports and materials; with the Programme Performance and Accountability Team on Programme Evaluations; and across the organisation to source materials from Country and Regional programme offices.

This and plenty more, are available on Oxfam’s website.

Everything about that says it’s a job. There’s an application form, with a deadline, and interview and start dates. So why doesn’t Oxfam pay a wage, in accordance with the law?

The fact that they don’t means that they recruit interns from comfortably-off backgrounds who are able to live without an income. The interns will be more likely to get salaried positions when they come up. The result is increased inequality of opportunity, fuelled by an organisation committed to fighting poverty. Big charities as well as media companies are likely to end up “hideously posh”. Some would argue they are already.

I’ve asked Oxfam’s press office for their reasons for such apparent breaches of the law. I’ll post their reply here.

Meantime, here’s the advice given to MPS, themselves long-standing users of interns, from w4mp, a website maintained by the resources department of the House of Commons:

Remember – you must always make clear that an expenses-only intern is under no obligation to provide services for you, work certain number of hours/days, or perform particular tasks. The emphasis should be on their educational and career development – what you can do for them, rather than what they can do for you. While it is all very well to make the initial promise that an intern is under no obligation, this must be adhered to throughout the internship – even if you find changes to the duties and volume of parliamentary work are threatening to overtake agreements initially made.

My advice to anyone who has worked for an organisation in a role thinly disguised as an intern is to invoice for the hours they put in. The national minimum wage applies, and has to be paid.

Credit unions are a very  good choice. Their loans are designed to be affordable. Members can be encouraged to save as they make repayments. Some unions offer financial education and other support.

Loan sharks are disastrous. Their loans are illegal, very expensive and very difficult to pay off. Rather than help, they offer intimidation and threats of violence.

How much is the difference in the cost of the loan? Andy Doylend, from Circle Anglia, a provider of affordable housing, takes the example of loans to fund Christmas spending. Borrowing from a credit union instead of a loan shark could save a  typical low income household £500 in debt repayments, he says. “More than enough to fund the whole of Christmas 2010 as well.”

The Financial Inclusion Centre has estimated that £29 million in illegal doorstep loans were taken out over the holiday. It calls it the worst Christmas in a generation for this type of borrowing.

The centre estimates the average amount borrowed by households to cover Christmas at around £288. Interest rates of loan sharks can be around 825 per cent, with some as high as 1,500 per cent. A typical borrower will pay off £820. Many will take at least 56 weeks to repay their loan. A large number of Britain’s poorest households will still be paying off this year’s debt as next Christmas approaches
An estimated 200,000 households a year borrow from loan sharks. That is a 22 per cent rise over the past three years.

Why is business booming for loan sharks?  The simple answer is lack of known alternatives, made worse by the credit crunch. Doorstep lenders – legal ones, who specialise in home loans to low-income families – were affected as other lenders were. One company, London Scottish Bank, went bust. Another, Cattles, scaled back its operation and massively reduced the loans it made.

That created the vacuum that the loan sharks moved to fill.

Loan sharks do not generally target young people. Their victims are usually householders on estates, with young families. But young people will be targeted by them when they get older and take on responsibilities. Which makes now a vital time to learn about the risks, and build up a habit of saving and affordable borrowing – of which credit unions are the best option.

Two moves for anyone working with young people:

• help them explore credit unions. The best starting place is the Association of British Credit Unions. The search page tells you what is available in your area.
• let them know about loan sharks. A good place is the government’s loan shark website.

That’s  only worth mentioning because Jill Insley is a respected and established financial journalist. She wrote about her money problems in the Guardian on Saturday. She has mentioned them before, in the Observer where she used to edit the Cash section.

She is not alone in admitting the enormous gulf between the advice she dishes out to readers and her own ability to handle money. That edition of Saturday’s Guardian was full of finance writers explaining all the things they tell others to do but haven’t got round to themselves. They include sorting out their pension, making a will, drawing up a budget, switching to a better current account….and so on.

Even allowing for a bit of exaggeration to make a lively feature, it’s clear that Guardian finance writers don’t score highly for their financial capability. Making ends meet, keeping track of finances, planning ahead, choosing products…all FAIL. This does not inspire confidence.

There’s another unfortunate effect of their relentless dishing out of advice and information. It risks demoralising  young people, overwhelming them with the volume of things to think about. It adds to a sense of mystique around handling money. It makes simple things complex, and manageable things seem impossible.

Perhaps Jill Insley and her colleagues would consider a disclaimer on the pages they write:

None of us actually do this stuff. We just write it to worry you. That’s because it suits our advertisers if we create an atmosphere of fear and uncertainty. That way, some of you will buy products you don’t need and to chop & change the ones you do.

In reality, you can be an above-average manager of money without paying attention to any of this guff.  Just use common sense and the basic products that have been available for years. Take what we write with a pinch of salt, except this disclaimer.

Not likely to happen. But finding other ways to get that message across to young people could be reassuring and empowering for them.

Writing in the Sunday Mirror, Balls said:

Young people shouldn’t need a bonus of £100 every six months to convince them to stay on, not on top of the weekly money they receive.

It’s a view that misses the financial realities of many young people’s lives. It’s not that the payments convince them to stay on. They enable it. Without the bonuses, many will not be able to afford to complete their course, whatever their attitude to it.

The savings are estimated by the Department for Children, Schools and Families to be worth £49 million  in the coming financial year and £96 million the following year. That is not massive in the context of education spending. But the impact on poorer students will be decisive. An  NUS survey last year found that 65 per cent of those on maximum EMA would be forced to drop out.

I was interviewed earlier in the week by a financial journalist. We were talking about young people and bank accounts. I just heard that nothing I said made the published article (a known hazard in talking to hacks). Which spurred me to offer some thoughts here about this crucial bit of financial inclusion.

The argument is self-evident. If you don’t have a bank account and deal only in cash, planning ahead is very difficult. You have to put more effort into daily life. Your money is vulnerable, to theft, loss or simple evaporation. You’re not part of the mainstream, with all the risks that involves.

So why doesn’t everyone have a bank account?

An excellent way into answering that question comes from Toynbee Hall’s Services Against Financial Exclusion (SAFE). They identified some of the common barriers that prevent people opening accounts and running them effectively:

• Money laundering regulations – Proving ID and verifying address
• Staff communication
• Staff knowledge of products
• Financial capability of customer (knowledge, skills, confidence)
• Fear or mistrust of banks/Don’t see the relevance to them
• Geographical/physical restrictions

The list, which is expanded with notes on the website, is very helpful for anyone planning working with young people. For example, “a negative experience due to staff communication can often lead to an individual deciding against trying again.” You betcha. Young people can be made to feel they simply don’t belong in banks, and, if rebuffed or patronised, are not likely to queue up for a repeat experience.

The advice on the SAFE site is rather formal, but in itself is very sound. The sections on “what can be done to overcome the obstacle” give useful pointers to projects working to reduce young people’s exclusion.

Last week the Home Office announced a strategy to end violence against women and girls. Preventing violence in relationships will be included in personal, social, health and economic (PSHE) education.  The idea is to address attitudes which condone and perpetuate violence against women before they become entrenched in young people.

There are also plans for a national communications strategy, skilling teachers, and a health task force.

What’s it got to do with financial education?

A lot more than most people think.

Financial abuse is one of the common forms of domestic violence. A resource for health professionals produced by the NHS describes it like this:

Economic or financial abuse aims to limit a victim’s ability to access help. Tactics may include controlling the finances; withholding money or credit cards; making someone unreasonably account for money spent/petrol used; exploiting assets; withholding basic necessities; preventing someone from working; deliberately running up debts; forcing someone to work against their will and sabotaging someone’s job.

The guide describes how many abusers behave in ways that include more than one type of domestic violence. The boundaries between different types of domestic abuse, including emotional, psychological, physical, sexual, and financial abuse, are often blurred.

When the YWCA surveyed disadvantaged young women in its centres it found that a third of them had experienced some form of financial abuse — such as having money taken from them, or being manipulated with money to control or harm them. A very large proportion of young women said their male partners spent money earmarked for essentials on themselves.

Equipping young women with the skills and confidence  to recognise financial abuse for what it is, and explore ways not to endure it, is a fine objective. So is letting young men know the effects of their actions, and how financial abuse is linked to, and as unacceptable as, other forms of relationship violence.

The YWCA is one of the few groups raising awareness of the problem nationally. See its excellent description of the problem in a free downloadable information sheet.  In the young women’s stories section, Kelly and Kim talk about their direct experience of financial abuse.