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Young people and money

This advice applies to Scotland

This information applies to Scotland

On this page you can find out about banking and debt services that are restricted to young people. There are also special rules about young people making contracts. If you need more information about contracts you can contact the Citizens Advice consumer helpline on 03454 04 05 06.

Banking, credit and borrowing money

There is no age limit on opening a bank account but the bank manager has discretion about whether or not to allow a child or young person to open an account. There are restrictions on opening certain kinds of account, for example, as a young person you are not normally responsible for your debts and so you are unlikely to be granted an overdraft. If you have not left school, a bank may also be reluctant to give you a current account with a cheque book.

You can open a post office savings ordinary account at any age but you cannot take money out of the account until you are 7 years old.

You can borrow money at any age but access to loans may be limited because a contract between a lender and a young person under 16 will not usually be enforceable (see Debt).

If you are under 18 and you apply for a credit card you will have your application turned down.

For information about credit issues, see Borrowing money.

Debt

If you are under 16 you cannot usually have action taken against you for a debt because you cannot make a legally enforceable agreement. However, when the debt is for a purchase that someone of your age should be expected to understand it may be a binding contract and therefore the debt will have to be settled.

As a parent you are not generally responsible for your child’s debts unless you acted as guarantor in which case you are liable for the debt.

For more information on debt, see Help with debt.

Income tax

You are taxed independently on your income but you are allowed a certain amount of income which is tax free. If the total amount of your taxable income is less than the tax free allowance you can claim tax back with a form R85. This has to be done by your parent if you are under 16.

For more information, see Income tax.

There are special rules if a parent gives savings to a child. If you are unmarried, under 18, and your parents give you money which earns investment income of over £100, this will normally count as your parent’s income and should be entered on their tax return. An example of investment income is money earned from savings in a National Savings account.

If you are under 16 in Scotland, or under 18 in England, Wales and N.Ireland, and want to make a claim to HM Revenue and Customs for repayment of overpaid tax, your parent, guardian or trustee must make the claim.

For more information, see Tax refunds.

If you are under 16, are a non-taxpayer, and have a bank or building society account that pays interest, your parents can register to stop tax being automatically deducted from the interest. If you are 16 or over, you will need to do this yourself.

For more information go to the HMRC website at www.hmrc.gov.uk.

Further information for young people

Further information about money

The Financial Conduct Authority (FCA) has launched a website about money issues, designed specifically for young adults. The website is www.whataboutmoney.info/.

Other rights

You can find more information about the rights of children and young people elsewhere on this website.

For information about the general rights of children and young people, see Young people’s rights.
For information about employment, see Young people and employment.
For information about housing, see Young people and housing.
For information about family matters, see Young people and family.
For information about benefits, see Young people and benefits.
For information about health and personal issues, see Young people – health and personal.
For information about the law and young people, see Young people and the law.
For information about concessionary travel, see Concessionary fares for younger people.

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