Pocket money goes digital
The traditional piggy bank is predicted to disappear from UK homes as parents lead the way towards a cashless society, with children’s pocket money the latest expenditure to go digital, according to Money.co.uk.
The money website found that almost a third of parents (31 per cent) now pay their children’s pocket money directly into their bank accounts, with the figure rising to almost half of parents (46 per cent) with children aged 14 or over.
The research follows reports that cash has fallen behind both debit and credit card purchases for the first time, and predictions that fewer than one in 10 transactions will be made using cash by 2028.
Birthdays and Christmas
Traditional monetary gifting occasions are also moving away from physical cash. Six in 10 (59 per cent) of parents said they now send cash online for special occasions such as birthdays (41 per cent) and almost two fifths (17 per cent) said money from Santa was now being delivered digitally.
The money.co.uk poll of 2,000 parents with children aged four to 14 also highlighted that cash under the pillow could be on the way out too, with one in eight (13 per cent) parents stating the tooth fairy paid money straight into children’s accounts.
More than a quarter (27 per cent) of parents questioned revealed that their child doesn’t currently have a piggy bank and almost one in 10 (8 per cent) said their child had never had one.
Current accounts and prepaid cards like goHenry are the most popular forms of digital banking for children, with a quarter (25 per cent) of parents choosing to pay pocket money into them. Alternative digital payments such as eBay credit or Amazon and Argos vouchers were also used.
Teaching children to budget (26 per cent), convenience (24 per cent) and safety (20 per cent) are the main reasons parents have turned digital with pocket money payments, with almost two fifths (17 per cent) stating their child wants to spend their pocket money online or on their phone.
Salman Haqqi, personal finance expert at money.co.uk, said: “Pocket money is a wonderful way for children to start to learn about finances. New banking apps aimed at kids include some fantastic tools and games that make learning about money visual and fun, without the need for stockpiling spare change.
“As our love affair with online shopping continues to intensify and smartphone shopping now the second most popular way to shop, it makes sense that parents would move more of their expenditures online, including their children’s pocket money.
“At money.co.uk we’ve seen a 47 per cent rise in the number of visits to our children’s prepaid cards comparison table since February 2019, as more parents look to move to digital accounts for their youngsters.”