UK children to get inflation-busting rise in pocket money

One in five parents give their children pocket money by bank transfer, a survey has found, with youngsters in the UK set for a pay rise from their families this year.

Children’s average weekly “salaries” are to increase from £6.97 to £7.58, a jump which is almost twice the rate of inflation, according to a poll by Barclays that surveyed parents of children under 16.

While most parents are sticking to giving out cash, typically in exchange for help around the home, more than one in five (22%) opt for bank transfer.

Household chores including washing the car, looking after younger siblings and cleaning the bathroom tend to reap the highest rewards, the survey showed. It also found that sweets and chocolate are the most popular way for children to spend their earnings.

More than two-fifths (44%) of children decide to put the money towards a later purchase and more than half of adult respondents (53%) said their child is good at managing money.

Children’s early experiences with handling money can shape their financial behaviour as adults, according to the study published by the government’s MoneyHelper service.

By the age of seven, the University of Cambridge research found, most children understand the value of money, delaying gratification and the idea that poor choices now can affect their future.

Gillean Dooney, head of families at Barclays, said: “If your kids are happy to do their bit around the house, pocket money is a really good way of teaching them the value of money at an early age.”

Barclays’ research found many parents start giving their child a small amount when they turn seven.

“Many of the parents we surveyed said that this was one of the biggest motivators behind giving pocket money to their children,” she added.

Dooney recommended creating a visual savings plan with key milestones that children could track and tick off along the way.

Other banks have also rolled out services in recent months to encourage families to talk about finances early.

In October, NatWest acquired the London-based children’s pocket money app RoosterMoney, which is designed to get parents and children to practise budgeting skills together.

Comments are closed.