Kids hit hardest by inflation
According to Santander, ‘Kidflation’ has been hitting children in the pocket, as goods and services most commonly bought by children has risen at a rate two-thirds (68 per cent) faster than inflation (RPI) over the past year.
The research was an analysis of rate of inflation on goods and services typically purchased by the UK’s 10-16 year-olds and compared it with the rate of inflation for all goods and services.
It discovered that ‘kidflation’ drove up the price of goods routinely bought by children by 4.7% between June 2011 and June 2012, compared to just 2.8% for products and services in general, meaning children continue to be significantly worse-affected by the rising cost of living.
Alan Mathewson, CEO of Santander Cards, said: “Everyone tends to focus on the impact of inflation on the adult world but often we overlook the effect on children.
“The costs of everyday purchases made by children have been rising at a rate that significantly exceeds that of inflation in general, and children are also heavily affected by the reduced amount of money being spent on them by their parents because of difficult financial circumstances.”
Kidflation has now risen 19.7% in the past four years compared to just 11.7% for products and services in general.
In the past year, children have seen increases in bus fares (5.6%), cost of entertainment (5.0%), and increases in sweets and chocolates (4.3%) and clothing (3.5%).
On top of increases in goods and services that children enjoy, kids are also facing cutbacks on the amount being spent on them through shopping trips and family outings.
According to Santander, more than a third of parents said they reduced their children’s pocket money in the past year – up from 23% in 2011 – due to difficult financial circumstances, half of whom (18%) are now making them earn it by carrying out chores in the home, up from 13% in 2011.
The effect of reduced pocket money also means less going into savings, with fewer than two in 10 parents (17%) saying their children put money in the piggy bank at home, and fewer than one in 10 (9%) say their children put pocket money in a savings account.