The downside for kids enjoying pocket money this summer is that they could be the ones who are penniless in years to come. At a time when there is mounting concern over the nation’s savings gap, the findings from engage Mutual reveal that areas where parents are most generous with pocket money also happen to be regions where parents are least likely to save for their child’s future. Conversely, regions where parents are tightest with pocket money are places where parents are most active in squirreling savings away for their child’s future.
Comparison table: Proportion of parents in English TV regions that (a) give their children pocket money and (b) make regular payments into a child’s savings account.
| % that give children pocket money / a regular allowance
|| % that make regular payments to child savings|
| 1 East Midlands 55%
|| 1 London 40%|
| 2 South East 53%
|| 2 South West 38%|
| 3 North East 52%
|| 3 North West 36%|
| 4 North West 52%
|| 4 East Anglia 32%|
| 5 East Anglia 49%
|| 5 South East 31%|
| 6 West Midlands 47%
|| 6 West Midlands 30%|
| 7 Yorkshire 46%
|| 7 Yorkshire 26%|
| 8 South West 41%
|| 8 North East 26%|
| 9 London 33%
|| 9 East Midlands 19%|
(Base 2000 people / parents with children under the age of 25)
The findings are from the latest edition of engage Mutual’s 3GB study – an ongoing probe into family finance commitments between the generations – children, parents and grandparents. engage Mutual asked 2,000 parents how they financially supported their children.
- whilst the proportion of parents giving their children regular pocket money or an allowance (48%) remains at a similar level to last summer, the proportion of parents regularly saving for their child’s future (32%) is at its highest level for over a year. Mothers are a substantial driving force behind this savings culture (31%).
- beyond giving pocket money or a summer allowance, contributing towards higher education costs (11%) and driving lessons (10%) are the next most common financial commitments among parents.
- parental attitudes in Wales and Scotland presented interesting contrasts to trends in England. The findings for Wales and Scotland are stories of extremes. Compared to England where parents tend to either save or give pocket money, Scottish and Welsh parents were consistent on both fronts. In Scotland, parents were among the least likely to give pocket money (37%) or to save (30%), whereas in Wales, parents were among the most generous on both pocket money and child savings (66% and 40%).
- at a time when a growing number of children grow up in single parent households, the research reveals that children from single parent homes do not suffer when it comes to having pocket money (47% of children getting a regular allowance, compared to 49% of children that live in two-parent homes).
- the cost of financially supporting children is not something that ends when a child leaves home. Engage Mutual’s research revealed that 26% of parents with children over 25 claimed they were still giving their children pocket money or an allowance.
Karl Elliott, 3GB Spokesperson for engage Mutual Assurance, commented:
“In a credit card society that is driven by a have-it-now culture, it is pleasing that so many parents are saving for their kid’s future and those children in areas where parents are the tightest on pocket money will thank them in years to come when they enjoy the benefits of a healthy, matured savings fund.”
“As a national leader in Child Trust Funds, we are committed to providing simple, no-nonsense savings products that make it easy for parents to save little and often. We’ve also looked into what we can do to help children that missed out on the CTF and will be launching our new tax exempt Easy Save product for them later this summer. This product provides an opportunity for parents to save for their children’s future.”
1 BBC Online, 10th November 2006,http://news.bbc.co.uk/1/hi/business/6134926.stm
2 In March 2006, HBOS reported that 73% of parents are not saving for their child’s future, http://news.bbc.co.uk/1/hi/business/6134926.stm http://www.hbosplc.com/media/pressreleases/articles/halifax/2006-03-30-00.asp?fs=/media/press_releases.asp
3 ‘3GB’ is engage’s Three Generation Britain research index. Research was conducted by YouGov across a GB representative of 4,678 adults (including 948 parents with children under 16) in October 2006. The research explores the financial relationships of care between the generations and investigates shifts in traditional provision.
engage Mutual Assurance can be contacted on 0800 169 4321 or by visiting www.engagemutual.com
Notes to Editors:
- this research was undertaken by YouGov on behalf of engage Mutual Assurance. The survey was conducted between 17th and 19th July 2007 across a representative GB sample of 2,271
- If using this article on a website, please link to www.engagemutual.com using the following hyperlink text : http://www.engagemutual.com engage Mutual Assurance – meeting the changing needs of today’s modern families
- engage Mutual Assurance is a trading style of Homeowners Friendly Society (HFSL) and it’s wholly-owned subsidiary engage Mutual Funds Limited (EMFL).
- engage Mutual Funds Limited (EMFL) is a provider of the Child Trust Fund direct and in partnership with partners including Legal and General, ASDA and Debenhams stores.
- engage supports mutuality, friendly societies and the regional financial services industry through links with the Association of Mutual Insurers, the Association of Friendly Societies, Mutuo and Leeds Financial Services Initiative.
- established in 1980, Homeowners Friendly Society Limited (HFSL) is Registered and Incorporated under the Friendly Societies Act 1992, Reg.No.964F, it’s wholly owned subsidiary engage Mutual Funds Limited (eMFL) is Registered in England No 3224780. Both are authorised and regulated by the Financial Services Authority (FSA).
- Homeowners Friendly Society Limited’s FSA Register number is 110072 andengage Mutual Funds Limited’s FSA Register number is 181487. You can check this on the FSA’s Register by visiting the FSA’s website www.fsa.gov.uk/register or by contacting the FSA on 0845 606 1234