MARCH 2018: Parents are being forced to dip into their children’s piggybanks and savings accounts to supplement day-to-day living costs, a new study has found, as generous parents and grandparents are now giving children more than ever.
The survey of 5,000 parents found that a fifth (19%) have borrowed money from their children’s bank accounts in order to pay for wider costs, with nearly half (49%) doing so to cover the household bills.
Reflecting the strain rising costs are having on the household budget more broadly, almost a fifth (19%) of those parents had borrowed money to cover the cost of groceries, whilst a sixth (17%) had done so in order to cover childcare.
The findings form part of the latest Parentdex report from comparethemarket.com on pocket money.
The report, which looks at the spending habits of children in the UK, found that children today receive an average of £23 a month – giving them £276 to spend every year, and – collectively – a spending power of £3.9 bn.
In addition to the regular pocket money pay-outs, the survey also revealed that children’s saving accounts are relatively healthy too, with the average child having a significant £982.50 stashed away in savings. A fifth of children (20%) have savings worth £2,000.
This could be down to the fact that, for children, pocket money is not their only source of income. Indeed, on top of their usual allowance, 79% of parents admitted to giving their child extra money to cover unforeseen requests, such as new clothing or nights out with friends.
These ad hoc requests are not infrequent either, with almost a fifth (18%) of parents topping up their child’s pocket money once a fortnight, and over a quarter (26%) admitting to giving these extra handouts once a month.
Meanwhile, the Bank of Gran and Grandad appears to be another fruitful source of income for kids, with almost a quarter (24%) of grandparents contributing to the pocket money that parents pay their children. More popular though are ad hoc payments, with over two thirds (68%) of grandparents giving their grandkids generous handouts as and when they see them.
Unsurprisingly, children in the capital are the recipients of the highest amount of pocket money compared to anywhere else in the UK, with the average parent in London giving £29 to their child each month. This contrasts to children in the East of England who are given £19 a month and those in the South West who are given £20.
Fortunately, the parents polled also indicate a marked confidence amongst Mums and Dads in their children’s ability to manage their money effectively, with almost three quarters (74%) believing that their children will be well equipped to handle money as they approach adulthood.
In the absence of financial education at schools, this could be down to discussions at home, with nine in 10 stating that they have talked about financial management with their children.
Despite this though, parents do clearly feel that their children would benefit from additional teaching in schools – 83% of those polled thought that schools should do more to teach financial education.