One in seven three-year-olds receive weekly pocket money
One in seven (14 per cent) three-year-olds receive weekly pocket money, rising to more than a quarter (26 per cent) of eight-year-olds, according to The Nottingham.
The building society’s research, conducted by YouGov, looked into the UK’s pocket money habits, how much parents are giving each week, and how regularly children are receiving it.
It found about one in four (24 per cent) children who are given pocket money receive between £5 and £9.99 – meaning children who receive pocket money on a weekly basis are potentially pocketing £520 a year. A lucky 2 per cent of children received between £30 and £39.99 a week – between £1,560 and £2,079 a year.
Weekly was the time period most popular for parents who regularly give their children pocket money, with nearly one in four (23 per cent) children receiving it once a week. One in ten (10 per cent) children receive pocket money once a month, and around a fifth (21 per cent) of parents didn’t have a set pattern for giving cash to their children.
One in five (20 per cent) of parents don’t give their children any pocket money, and 8 per cent of children are only given spending money when they need it.
When it came to parents saving for their children’s future, education was the biggest priority with 14 per cent of parents with children under 16 currently saving for their school, college and university costs.
Jenna McKenzie-Day, senior savings manager at The Nottingham, said: “Whether or not to give children spending money can be quite a divisive topic, but there are definite benefits to teaching children how to manage money from a young age, and get them into a savings habit.
“The Junior ISA has been one of the most popular products this year as it benefits from being a tax-free savings account and is a good option for parents looking to start building a savings habit for their little ones. We have seen a 62 per cent increase in parents opening one for their children the first few weeks of the 2019 tax year, compared to the same time period last year.”
Five tips on how to introduce good saving habits to children
- Set small goals. If you give your child pocket money, ask them what they want to spend it on and tell them how much it costs. Each time you give them money, chat about how much more is needed and when they might be able to afford it.
- Explain where money comes from. It’s natural for children to think that money is infinite, so explain that you have earned it by working. You could even give your children pocket money in exchange for chores such as tidying their bedroom.
- Let them make decisions. Once children have their own money, let them decide how to spend it. If they buy a DVD and then later don’t have enough to get some sweets, they’ll soon learn to prioritise.
- Set a good example. If you are making impulse buys, or always going for the more expensive option, children will notice and develop similar habits. If you are smart with your own money, then children are more likely to follow suit.
- Research the best savings account. Going through the research process with them is a brilliant way to help children understand saving, interest and tax.