Three quarters of parents in the UK pay their children pocket money, at an average rate of £5.75 per week, according to research from Aviva.
The data, which comes from Aviva’s family finances report, highlights parents’ varying ideas about how best to support their children financially. While the average limit is £5.75 per week, 2% of parents refuse to set a limit, simply giving their child “as much as they need”.
The figure of £5.75 is an average taken across all age groups; the amount of pocket money children receive varies substantially according to age. Children aged 5-8 years old earn an average of £2.62 per week, increasing to £9.88 per week for 16-18 year olds. The figures also showed steep regional variation; London parents pay the most, with an average across all age groups of £13.12 per week. By contrast children in Wales can only expect to be paid an average of £4.64 per week.
When it comes to teenagers, parents have varying attitudes towards part-time work. Of the 23% of parents who said that their teenager has a part-time job, 70% say that they encouraged their teen to take a job for the money. Fifty five percent said that they had emphasised the personal benefits to their child, such as building confidence and a sense of responsibility. By contrast, 60% of teenagers don’t have the need or desire to work because their parents will support them for “as long as they need it” (3%), or until they leave home (9%).
There are differences of opinion among parents regarding when it is best to “cut the apron strings”. Thirty two percent of parents thought that the best time for a child to become financially independent was after their 22nd birthday, whilst 24% of parents stop pocket money when their child is 16. One in five stop paying up when the child is 18 years old, with 28% stopping when the child gets a part time job.
It appears that parents are increasingly making an effort to teach their children to be money savvy; the typical age for a child to get their first savings account is five years old. While 45% say they let their children spend pocket money on “whatever they like”, a third encourage regular saving from a young age, and 37% say that they make regular contributions to a savings account on their child’s behalf.
Tim Orton, Aviva’s product director for pensions and investments, welcomed the findings:
“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.”
“Teaching children how to manage their money from an early age and save something every month is an important trait. Saving a little and often will definitely stand them in good stead for later life.”