Kids left feeling the squeeze as pocket money drops
Published 6 August 2014 by Daniel Griffiths
You may think adults are the only ones really feeling the squeeze this year, but it seems children are facing some financial troubles of their own.
It seems as though adults aren’t the only ones feeling the pinch this year, as 8 to 15-year-olds all over the country are being forced to part with some of their precious pocket money.
The recovering economy may be welcome news for many, but it doesn’t seem to be having much of a positive effect on our kids’ finances. According to Halifax’s Annual Pocket Money Survey, young earners are facing average income cuts of 2.4%, falling from a six-year high of £6.50 per week to £6.35 this year. To make things worse, there’s also been a 2% decrease in the number of kids that actually receive pocket money, taking the total to 82%.
So, how are Britain’s amateur earners getting on in 2014?
Save, save, save
Even though pocket money appears to be decreasing for many kids, it appears savvy youngsters are trying to make their money stretch as far as possible. Around three in four children are on-track to be money managing maestros, as they admit to saving part of their pocket money each week. Meanwhile, a very cash-conscious one in 10 are stashing away all of their pocket money. Alongside this, around half of 8 to 15-year-olds are opting to sensibly save as much as half of their earnings every week.
Piggy banks still remain the most trusted money guards, as 42% prefer to keep their cash stored in a money box, while two-fifths are taking the next step up and keeping their money in the bank. But although many children are trying to build up a healthy savings pot, only a third said they would attempt to save for something expensive that they wanted badly, yet two-fifths would prefer to use their age to their benefit and ask for it as a present.
Despite the fact a greater proportion of boys get given pocket money than girls (84% of boys compared to 79% of girls), it appears the girls are learning the value of money more practically– as they are more likely to be found helping around the house in exchange for their ‘wages’. While only 39% of boys tidy their bedrooms to cash in from their parents, 45% of girls do, and similarly 21% of boys get pocket money for cleaning, compared to 28% of girls.
But, it seems all the girls’ hard work isn’t being as justly rewarded as the boys, as girls receive an average of just £6.15 a week, where boys receive £6.50. This may not sound like a lot, but this 35p a week difference equates to nearly £20 less per year.
It’s a big old world
The rising cost of living in the capital looks to be having a positive effect on the income of its youngest inhabitants too, as pocket money wages increased by 8% over the past year. Kids in London have it best, as their weekly income averages at a healthy £8.26, compared to those in East Anglia who lose out on the most, earning just £5.15 a week. This difference works out at over £160 a year.
Dissatisfaction with weekly wages is also a problem in the pocket money sector, as two fifths of children don’t feel what they get is enough, and a quarter believe their peers are on a superior salary. Yet there are still plenty of happy campers, as just under half feel at peace with the money they receive from their parents and relatives.
The true value of money
Giving your kids an allowance can be a great way to help teach them about finances, as well as being a reward for working hard. Treating your children with a little bit of pocket money in exchange for doing a few small tasks or chores can help to teach them the value of money, and it might make them think twice before spending it all at once. After all, there’s no better feeling than knowing the cash in your hand was earned by your own hard work.
Encouraging your children to save their pocket money from a young age can help to reinforce good spending habits in the future. To assist with this, you could consider getting them a piggy bank to put their spare cash in. Of course you don’t have to force them to save if they don’t want to, but they might surprise you with just how frugal they really are. Just make sure you don’t carry out any piggybank pinching!