Managing My Money

There are many banks, building societies and post office branches to choose from.

Most people use a current account for everyday money management.

A current account lets you:

• pay bills by Direct Debit or standing order

• receive money, such as wages, benefits or allowances

• use an overdraft (only if the bank agrees)

• pay for things with a debit card

• take out cash from a cash machine

You can also manage your money by:

• using your bank’s secure app to check your balance and make payments

• setting up text alerts to tell you when your balance is low

If you have used an overdraft before, always check the fees and charges.
Going over your agreed overdraft can cost extra money.

There are many types of savings accounts.

They each have different rules and interest rates.

It is a good idea to book an appointment with your bank.
They can explain which account suits you best.

Most banks offer special accounts for young people.

An overdraft lets you borrow money from your current account.

This happens when you spend more than the amount you have — this is called going overdrawn.

There is usually a charge for using an overdraft.

It is better to agree an overdraft limit with your bank before you need it.
This helps you avoid extra charges.

Debit cards take money straight from your bank account.

Credit cards and store cards let you delay payment and pay later.

Credit and store cards often charge high interest if you do not pay the full amount on time.

Always check:

• the interest rate

• the payment deadline

• any late fees

If you manage them well, credit cards can help build a good credit score.

What is a credit score?
A credit score is a record of your money history.
It shows how well you manage borrowing and repaying money.
Banks look at your credit score when you apply for a loan or credit.

Budgeting helps you manage your money.

It does not matter if you live with family or live independently — it is never too early to budget.

Start by listing your income, such as:

• wages

• benefits

• student finance

• pocket money or allowance

Then list your essential outgoings, such as:

• rent

• energy bills

• food

• travel

These “have to” costs usually come first.

You can then plan what is left for savings or fun activities.

Even if you cannot switch energy providers right now, you can still take steps to reduce bills, like turning off lights and unplugging chargers.

The National Minimum Wage and the National Living Wage depend on your age and whether you are an apprentice.

You must be at least:

• school leaving age to get the National Minimum Wage

• 23 or older to get the National Living Wage

Apprentices
Apprentices get the apprentice rate if they are:

• under 19, or

• 19 or older and in their first year of apprenticeship

After the first year, apprentices aged 19+ get the minimum wage for their age group.

Income Tax

You pay Income Tax on most types of income.

You do not pay tax on all your earnings because everyone has a Personal Allowance.

The Personal Allowance for the 2023/24 tax year is £12,570.

This means you can earn up to £12,570 before paying any Income Tax.

Students also have a Personal Allowance.

National Insurance

National Insurance is a tax paid by workers and people who are self employed.

You pay it if you are:

• 16 or older

• earning over a certain amount

National Insurance helps you qualify for some benefits, such as:

• the State Pension

• Maternity Allowance

You must pay National Insurance if your earnings are over the threshold for your situation.

If you are looking for work or on a low income, you may be able to get financial support.
This can include Universal Credit.

The benefits you can get between ages 16 and 24 will depend on:

• your situation

• where you live in the United Kingdom (UK)

• whether you are studying, working, or living independently

If you have a child

Check if you are getting all the support you can.

You may get help with:

• childcare costs

• money during pregnancy

• money after your baby is born

More information:
childcarechoices.gov.uk

If you are under 18

If you are a young carer, you may be able to get financial support.

If you are 16 or 17 and a care leaver

You may be able to claim benefits to support you if you are living independently.

Saving a little money regularly is a good habit.

Even small amounts add up over time.

Savings can help you:

• reach your future goals

• be ready for emergencies

• avoid borrowing money

Child Trust Funds

If you are over 18 and were born between 1 September 2002 and 2 January 2011, you can now access your Child Trust Fund.

These accounts were opened for you when you were born, with £250 or £500 from the Government.

Even if no one added more money, there should still be some savings there.

You might have anywhere from a few hundred pounds to over £1,000.

Loans and overdrafts can seem like free money, but they are not.

You usually have to pay back:

• the amount you borrowed

• plus interest

Only borrow money when you need to, and try to repay it as soon as possible.

Different ways to borrow money include:

• borrowing from family or friends

• using an overdraft

• applying for a personal loan

• using a credit card

When you borrow money, you make an agreement to repay it.

If you do not repay it, the lender can take steps to get the money back.

If you are struggling with debt

There are support organisations that can help you, such as:

• National Debtline

• StepChange

Avoid companies that charge large fees to “fix” your debts.
Avoid payday loans, as they have very high interest rates.

Insurance helps you replace things if they are lost, damaged, or stolen.
It can also support you in emergencies.

Insurance brokers

An insurance broker is a trained adviser.
They can help you choose the right insurance at a price you can afford.

They are paid by commission.

Comparison websites

These websites help you compare prices for:

• insurance

• energy bills

• broadband

• bank accounts

This helps you find the best deal.

Types of insurance to think about

You should think about insuring things that matter to you or would be hard to replace.

Car insurance is legal and not a choice.

If you drive, you must have car insurance — even if the car is not yours.

Always check the small print about “driving other cars”.

Contents insurance covers your belongings if they are stolen or damaged.

You can get contents insurance even if you:

• rent a room

• are a student

• live in shared housing

Policies have different rules, so read the details carefully.

Some people choose to insure their phone or laptop.

This can help cover the cost if it is:

• damaged

• lost

• stolen

This type of insurance is optional.

It can help you avoid large bills if something goes wrong.

Most health needs are met by the National Health Service (NHS).

You should register with a general practitioner (GP).

If you have a learning disability (LD), you can join the GP’s Learning Disability Register.
This gives you a yearly health check.

Some people choose private health insurance.
This may help you see a specialist faster.

It is usually cheaper when you are young.

Most policies do not cover pre‑existing conditions — conditions you already had before taking out the insurance.

Building insurance protects the building you own.

You must have it if your home is mortgaged.

It is recommended for all homeowners.

If you have a pet, you might choose to get pet insurance.

This helps cover the cost of vet bills if your pet becomes ill or has an accident.

Vet bills can be very expensive, so many pet owners — especially dog and cat owners — take out this insurance.

You may be able to borrow money to help pay for:

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• university or college fees

• living costs

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You may get extra help if you are disabled.

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You only start paying back your loan when you earn over a set amount.

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Your repayments depend on what you earn, not what you owe.

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Interest is added from the day you take out the loan.

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Terms and conditions can change.

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More information

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A mortgage is a loan used to buy a home.

It can also be used to borrow money against a home you already own.

A lender will tell you how much they are willing to lend you.

This amount is based on your:

• income

• debts

• credit history

The amount you can borrow may be more than you can comfortably afford.

Lenders do not know all your living costs.

To know what you can afford, think about:

• your income

• your monthly bills

• your savings goals

Mortgage payments often include extra costs such as:

• home insurance

• property tax

• mortgage insurance

Make sure these are included when you work out your budget.

If you are 22 or older and earn over £10,000 a year, your employer must automatically put you into a workplace pension.

This is called automatic enrolment.

You and your employer will both pay money into your pension.

This helps you save for later life.

If you are under 22 or earn less than £10,000, you can still choose to join your workplace pension.

Saving early can help your money grow over time.

A parent or another adult can apply to become your deputy if you lack mental capacity.

This means you cannot make a decision at the time it needs to be made.

You might still be able to make some decisions for yourself at other times.

People may lack mental capacity for different reasons, such as severe learning disabilities.

Only the Court of Protection can appoint a deputy.

The deputy is authorised to make certain decisions on your behalf.

A property and financial affairs deputy makes decisions about:

• paying bills

• managing bank accounts

• budgeting

• dealing with benefits or savings

A personal welfare deputy makes decisions about:

• medical treatment

• daily care

• where you live

• your personal support

Not everyone needs a deputy.
It depends on your situation and what support you need to stay safe and well.