Young members of trade union Unison’s northern region argue this is unfair. They have launched an e-petition to get the topic of raising the rate for young workers debated in parliament.

The minimum wage is currently [...]]]> The cost of living is rising for young people. Yet the minimum wage was frozen for workers under 21.

Young members of trade union Unison’s northern region argue this is unfair. They have launched an e-petition to get the topic of raising the rate for young workers debated in parliament.

The minimum wage is currently £6.19 an hour for workers aged over 21, and £4.98 for 18 to 20 year olds.

Clicking on the copy below links to the epetition. It can be signed by anyone who is a British citizen normally living in the UK.

Ask them, and you will get an opinion. That may be a hunch and may be right. But it is not hard to come up with an accurate total estimate. This might challenge some initial assumptions, and perhaps begin a [...]]]> Is passing the driving test a realistic possibility for young people? Or an unaffordable dream?

Ask them, and you will get an opinion. That may be a hunch and may be right. But it is not hard to come up with an accurate total estimate. This might challenge some initial assumptions, and perhaps begin a process of planning and budgeting.

So try this quiz. Put figures to the following. If you don’t know, guess.

• How much does a provisional licence cost?
• How much do driving lessons cost, and how many do people normally have before passing the test?
• How much do the driving tests – the theory and the practical – cost?

Spend time guessing, debating or researching the answers. Then check with the figures below, handily summarised by the Money Advice Service. The section also has useful additional estimates and links on the costs of motoring.

It’s the first-ever youthmoney video [...]]]> Here is a handy way of exploring some of the misunderstandings that young people may have about housing benefit. It is especially useful for anyone who thinks that if you are on benefits or a low income you can just apply for housing benefit and your rent will be paid.

It’s the first-ever youthmoney video and it’s got some very rough edges. If the production values are not up to your standard, here are the salient points:

• Young people under the age of 35 with no dependents who live in private rented accommodation and qualify for housing benefit will be paid a maximum amount, set locally.
• You can find out what this maximum amount is by going to the Directgov website and finding the page on Local Housing Allowance rates.
• In the pulldown menu where you have to select how many bedrooms you are entitled to, choose “shared accommodation”.
• Select the local authority area in the other pulldown menu, and click on submit.

To clarify, this is not welfare benefits advice. There are exceptions and different rules for people in particular categories. It is a useful tool when discussing independent living. Find out the rents locally in your area, and compare them with the maximum housing benefit that a young person would get (if they qualify for the maximum amount).

Youth unemployment since 1992, provided by House of Commons library

What is immediately noticeable is what a tough time today’s 16 and 17 year olds have. Those who [...]]]> What was unemployment like when you were a teenager? Or when someone advising you was your age? Here’s an at-a-glance graph of the past twenty years.

Youth unemployment since 1992, provided by House of Commons library

What is immediately noticeable is what a tough time today’s 16 and 17 year olds have. Those who  are under-18 and looking for work have an unemployment rate of 39.4 per cent. That is almost double the rate for 18-24 year olds, which at 20.2 per cent is high enough.

Note also how bad things have become recently. The rise in the line since 2008 is dramatic for both age groups. It is easy to see why youth unemployment is figuring high on the political agenda. The situation is already a lot worse than it has been over the past two decades.

So what do you do? Ed Balls just paid up, said [...]]]> Ed Balls is in Greggs buying eight sausage rolls. They’re 60p each. When the assistant hands them over she asks for £4.70. He should know this is wrong, because he is a financial whiz-kid and shadow chancellor of the exchequer. Eight 60ps are £4.80.

So what do you do? Ed Balls just paid up, said nothing and was 10p to the good.

It hardly matters. It’s only worth mentioning because of the general merriment around the pasty tax or sausage roll toll.

But, as the politicians say, there is a serious point here. In fact, two interesting financial education points are worth exploring:

• What would you do if undercharged in a shop? Would your conscience bother you?
• What happens if you work in a shop or bar and there’s a shortfall in the till? Can the employer deduct it from your wages?

Here’s how one young man got hold of the wrong end of the personal allowance stick. He’d just got a job and told a youth [...]]]> Budget week is a good time to explore some of the basics about tax, particularly personal tax allowance. Take time, because it is complicated, and some young people get confused.

Here’s how one young man got hold of the wrong end of the personal allowance stick. He’d just got a job and told a youth worker:

I’m going to work there for a few months, then pack it in and get another job.

Why?

Because I know I can earn £7,000 without paying tax. Then I’ll get another job, earn another seven grand without tax….

It’s a fail. But it shows that he’d at least half-listened to a worker on money matters. She’d said everyone has a personal allowance, which is an amount of money you can earn without paying tax. He just got the operational detail wrong.

Aim to get across some key ideas, including.

• For the current tax year, the basic personal allowance (tax-free amount) is £7,475. The amount you earn over and above your personal allowance is your taxable income. You have to pay income tax on that taxable income.
• Young people who earn more than their personal allowance (which is roughly £140 a week) pay tax on the remainder at 20 per cent.
• They also pay 12 per cent national insurance. This is often forgotten in media and political discussion. But when a young person looks at a pay-slip It is a hefty deduction. More than half as much again as the income tax.
• For most workers the tax and national insurance will be deducted through the pay-as-you-earn (PAYE) tax system. The employer takes off the tax before you get paid, so you don’t have a big bill at the end of the year. It spreads out the tax and the tax-free amount throughout the year. That’s what puts an end to the young man’s cunning plan (see above).
• You don’t have a period where you earn tax-free up to your allowance and then get clobbered for tax on the whole of your future earnings. Good thing too. Your budgeting would be impossible.
• Know your national insurance number and give it to your employer. This will help make sure you pay the right amount of tax and national insurance.
• You’ll also need a tax code, sent by the tax office (also known as HMRC, or Her Majesty’s Revenue and Customs). Until you get this code, the employer will use an emergency tax code – which means you could pay too much or too little tax to begin with. This will be adjusted for later, which can be a pain.

There are well-developed resources on line for learning about tax. HMRC do one, intended for classrooms but could be useful for other settings. Or review it looking insights and ideas that might be interesting to young people. Find the full resource or try the income tax module now:

The national minimum wage is be raised in October by 11p an hour. Not for most young people, though. The rates for 16-17 olds and for 18-20 year olds have been frozen. The apprenticeship rate is to go up 5p an hour.

From 1 October 2012 the rates will be:

The proposal guarantees a job of 25 hours a week at the minimum wage to young people aged 18-24 who have been claiming Jobseekers’ Allowance for more than [...]]]> The jobs guarantee for young people proposed by opposition leader Ed Miliband will not make much difference to most jobless young people, says influential analyst Jonathan Portes.

The proposal guarantees a job of 25 hours a week at the minimum wage to young people aged 18-24 who have been claiming Jobseekers’ Allowance for more than a year.

While this would be welcome for the 50,000 young people who qualify, it leaves many who do not. Many young people are not on JSA, or not continuously. Others are out of the system entirely. According to official figures quoted by Portes:

• There are more than 200,000 young people aged 18-24 who have been unemployed for more than a year
• Well over a million in the age group are not in education, employment or training

Of course, the move does nothing for 16-17 year olds, most of whom are not entitled to JSA at all.

Analysis by Jonathan Portes, director of the National Institute of Economic and Social Research, is on his blog Not the treasury view.

The most helpful breakdown was established some time ago by the Financial Services Authority. Researchers identified five key areas, sometimes [...]]]> If you are helping a young person improve their financial capability, what are you really trying to do? What areas should you focus on? How do you know if you are covering the core elements?

The most helpful breakdown was established some time ago by the Financial Services Authority. Researchers identified five key areas, sometimes called domains. Here they are, with notes on what they might mean in practice for young people:

• Making ends meet. Young people who are coping live within their means. They keep up with their bills. If they do spend more than their income, they know ways to put it right. If they borrow, they know the costs are affordable.
• Keeping track of spending. This means knowing how much is in your pocket or your bank account at any time. It means waking up in the morning and knowing where your money went last night. And the same for the past week or month. It means checking receipts against bank statements, and checking your balance before withdrawing cash.
• Planning expenditure. A money-wise young person knows that spending doesn’t happen in a steady regular stream. Some bills are monthly, or quarterly. Holidays need planning for. So do birthdays, and other celebrations. Thinking ahead and putting money aside to cope is a key skill.
• Choosing products. Today’s consumer has to be highly sophisticated. It isn’t just a question of knowing what products and services do – though that is complex enough. Young people also have to negotiate the maze of confusion-pricing, tariffs, packages and special deals.
• Staying informed. Financial products rarely stay the same for long. A savings account with a reasonable interest rate now may be pitiful in six months’ time. Tax rates change. So do benefits. Housing rental costs vary according the market. Young people’s circumstances can see dramatic variations in a short time. A financially astute young person is aware of these changes and keeps an eye on what is happening.

For most young people, the first three domains will be most relevant and urgent. But do not ignore the last two. They relate to financial products, which includes a basic essential for planning ahead and keeping track – bank accounts. Also it is worth being aware that many young people do have lump sums – from savings, legacies, gifts, compensation payments – that they need to manage.