Banking News Save Or Splash Out 30 Per Cent Of Children Use Pocket Money For Savings 2141

Save or splash out? 30% of children use pocket money for savings

29 August 2008 / by Daniela Gieseler
The majority of children receive their weekly pocket money allowance, but rely on Mum and Dad to fund big expenses, a new survey on pocket money by Halifax has found.

The average amount children got paid by their parents in 2008 was £6.13 per week, while those living in London and Scotland were at the luckier end of the scale with £8.47 and £8.20 respectively.

However, the average amount of pocket money paid per week has gone down steadily for three years, when kids were paid an average £8.37. If this had risen in line with inflation, today’s pocket money would be £9.43 – therefore in 2008 it is down by £3.30 in real terms.

When seeing an expensive item they cannot afford with their pocket money, most children (43 per cent) will resort to asking for it for their birthdays or for Christmas, while a third will save up in order to buy it, and another 17 per cent will badger their indulgent parents into buying it.

On top of the list are mobile phones, which 76 per cent of children own, 80 per cent of which have their monthly phone bills paid by their parents or guardians on top of their pocket money.

Other popular items include iPods or MP3-players and music downloads from the internet, most of which seem to be paid as extra by the parents. All in all parents fork out £381.52 per child per year to buy and maintain their electrical equipment.

The research also found that 28 per cent children spend all their pocket money for minor purchases, while an encouraging 30 percent manage to save between £1 and £5 a week, either for bigger purchases or for their children’s savings accounts.

Tony Wilcox, head of savings at Halifax, said: “Our latest findings really show a mixed bag – pocket money doesn’t appear to have increased this year but children don’t seem to fund any major expenses from their allowance.”

He welcomed the findings that a significant number of kids do not spend all their pocket money at once: “It is encouraging to see the savings habit is ingrained from a young age. Almost a third of children save some of their pocket money each week.”

© Fair Investment Company Ltd

Written by Editorial Team