Pocket money is a great way to teach children about earning money, saving money, and spending it wisely. The new research from Santander reveals the true drivers behind the ‘pocket money economy’ and the various ways the children in the UK are learning about money. Whilst 77% of parents provide their children with pocket money, the new report also shows that there is ‘extra’ money which is being given by a third of parents as their children have completed a range of activities. These activities may include helping around the house, making sure that they behave well, and performing well in sports. On average, the amount earned in a month for completing these activities is £7.70 with the highest earning activity being getting to school or college on time.
However, for children that step out of line or do not complete their chores, parents may decide to give financial ‘fines’. The report shows that 18% of parents take money away for failing to complete their household chores and 15% for not behaving well at school. There are 13% of enterprising parents that are applying a form of ‘tax’ to their children’s earnings to support the running of the home. The 42% of parents that pay their children pocket money would consider adding ‘tax’ so that their children can learn about tax and prepare them for the real world.
The data from Santander’s report also revealed that the differences in ‘income’ for children were clear across the UK, with children in London being given an average amount of £26.70 when compared to the national average of £18.36. When it comes to earning extra pocket money, on average, boys will get 33% more than girls (£6.99 when compared to £4.67) for completing household chores and 50% (£8.28 when compared to £4.18) more for being well-behaved at school.
In the survey, children were asked what their biggest motivators were for completing household chores and money (43%) was by far the biggest driver. The other motivators were being given chocolate (24%) and being told they are good or getting to stay up later which appealed to 23% of children. When they were asked about saving their pocket money, 84% of children who get pocket money said that they like to save the money they get from their parents. Out of those children, 89% were boys and 77% were girls.
About the Author
Stuart Mosely (CeFA, CeMap, CLTM) founded SJ Financial Solutions in June 2005 having spent 12 years with big corporates such as Halifax and Santander. He felt the personal touch and straight speaking was missing from financial and mortgage advice services and set up SJ Financial Solutions to change this.
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