18 Year Old refused savings account

Naomim

Hi All,

My son recently turned 18. He has an old kids savers account with Halifax earning about 1.45%. Currently has almost £5k in there.

I wanted him to open a new Cahoot savings account to move his funds into but it was refused. I'm assuming as he has no real credit history. He has a metro bank current that his wages go into. I really don't want to encourage him to get a credit card to build history as he's not great with his money (despite my trying to help him budget).

How is he able to get a better interest savings account?

Emmia

I don't really understand the link between a savings account and a credit card ?

Plenty of savings providers are available though, e.g. Chip (which I use and really like), Moneybox, other high street banks, etc. So if Cahoot don't want him, he can open an account elsewhere.

Chip is currently offering 4.84%, so only slightly less than Cahoot - and when the rates go up,  Chip applies it almost instantly  - no waiting for the start of the month.

dunstonh

I wanted him to open a new Cahoot savings account to move his funds into but it was refused. I'm assuming as he has no real credit history.

Savings accounts are not credit scored.    However,  a provider that exclusively relies on electronic ID methods could refuse him if he fails as its unlikely he has accrued enough data yet to pass electronically.  Most providers will revert to the manual method (passport, Driving Licence etc) but not all do.

Naomim

Emmia said:

I don't really understand the link between a savings account and a credit card ?

Plenty of savings providers are available though, e.g. Chip (which I use and really like), Moneybox, other high street banks, etc. So if Cahoot don't want him, he can open an account elsewhere.

Chip is currently offering 4.84%, so only slightly less than Cahoot - and when the rates go up,  Chip applies it almost instantly  - no waiting for the start of the month.

Sorry, I mentioned credit card as a way of building credit history as he doesn't really have any history. 

He does have a current passport but not driving licence. 

I'll look into the other accounts.

Thank you.

Sg28

Naomim said:

Emmia said:

I don't really understand the link between a savings account and a credit card ?

Plenty of savings providers are available though, e.g. Chip (which I use and really like), Moneybox, other high street banks, etc. So if Cahoot don't want him, he can open an account elsewhere.

Chip is currently offering 4.84%, so only slightly less than Cahoot - and when the rates go up,  Chip applies it almost instantly  - no waiting for the start of the month.

Sorry, I mentioned credit card as a way of building credit history as he doesn't really have any history. 

He does have a current passport but not driving licence. 

I'll look into the other accounts.

Thank you.

A credit history wont have an effect as a savings account is not offering credit. 

Its most likely an identity issue, I assume hes not on electoral roll? Did they give an actual reason for the refusal? 

Naomim

They said they couldn't verify him on Equifax so yes, could be the electoral roll. I'll look into that.

Emmia

There are other routes to building history, like a mobile phone contract, which if it's a monthly sim only deal could be very cheap - but otherwise get him on the electoral roll.

xylophone

Did he also have a Child Trust Fund?

Savings rates here

https://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

refluxer

His Halifax Kids Saver will have reverted to an Adult's Everyday Saver when he was 16 so he'll have been getting a low rate for a few years now, unfortunately.

Halifax do have a few different (limited access) savings accounts paying 4%+ though so it might be worth switching to one of those in the meantime, while you try and get sorted elsewhere. Halifax also have a Regular Saver account which pays 5.5%.

Naomim

Yes he had a child trust find which also had about £3k in which we need to look into moving I think. 

I'll have a look at the other Halifax accounts too.

35har1old

Naomim said:

Yes he had a child trust find which also had about £3k in which we need to look into moving I think. 

I'll have a look at the other Halifax accounts too.

Try building societies as they may let you prove ID in branch or by post using certified copies of passport and other documents