27th August 2013
Three quarters of parents pay pocket money with an average of £5.75 paid each week or £23 a month. The Aviva Family Finances Report suggests that parents are contributing £43m in pocket money every week.
The study unveils the average amount a child receives in pocket money, what control parents have over their child’s spending habits, and why parents encourage their children to take a part time job.
This amount of money varies depending on the child’s age and where they live, and payments do rise with age, but a small proportion of parents or 2% refuse to set limits, giving their child “as much as they need”.
|Age||Average pocket money per week|
|5-8 year olds||£2.62|
|9-11 year olds||£3.82|
|12-15 year olds||£6.96|
|16-18 year olds||£9.88|
|Across all ages||£5.75|
Regionally, London tops the charts paying the most pocket money across all age groups at an average of £13.12 per week). The West Midlands and the North East rank second and third, with £9.75 and £8.00 per week, respectively. A child in Wales receives the least amount of pocket money with only £4.64 per week on average.
When it comes to parents with teenagers 23% say their teenager is working part-time every week to subsidise their cash. Of those working, the majority of parents 70% have encouraged them to take on a part-time job for the money, while 55% want them to get employment for personal benefits such as building confidence or giving them responsibility.
However, a much larger percentage of children at 60% don’t have the desire or need to work, as parents continue to support them, giving them money “as long as they need it” at 3%, or until they leave home at 9%.
While 32% of parents think the best age to become completely financially independent is after their 22nd birthday, some parents are trying to encourage financial independence by cutting the apron strings much earlier. A quarter or 24% of parents stop pocket money when their child reaches 16 years old, 19% will waits until they are 18 years old and 28 per cent stop paying when they get a part-time job.
When asked to describe their role in opening their child’s first savings account, more than a third or 38% of parents said that they chose the bank or building society their child invests with, and selected the type of savings account they opened.
However, control over their child’s money often stops there, as 45% of parents admit to letting their child spend their pocket money on “whatever they like” each week. A third of parents try to encourage some sort of savings habit from a young age, with 21% inspiring them to save something for a “rainy day” or something special. A further 9% go a step further and encourage them to save some pocket money for the long term.
Thirty seven per cent of parents have taken matters into their own hands by making a monthly contribution into a long term savings fund on their children’s behalf.
Tim Orton, Aviva’s product director for pensions & investments, says: “With financial education due to be introduced to the school curriculum in 2014, it is good to see that some parents are already encouraging their children to grasp a basic understanding of what it takes to make and save money on a regular basis.
“Although many parents continue to pay pocket money indefinitely, or as long as their child needs it, there are encouraging signs that some do try to persuade their teenagers to get a part-time job in order to provide them with some financial independence and future security.”