At a time when the costs of raising a child is increasing at a rate faster than inflation1, and with young adults facing rises in the cost of education and house prices, the latest findings show that 48% of parents with children under 16 are not giving them pocket money. Instead, 41% prefer to make regular payments into savings vehicles for their children’s future2.
As part of its 3GB Campaign3 examining how money implicates family relationships, with the middle generation working harder to support children and elderly relatives, Engage Mutual Assurance asked a representative sample of 948 parents with children under the age of 16 how they had helped their children financially in the last six months.
- Just 34% of parents who gave their children pocket money in the last six months also made regular payments into a savings account for their children
- Parents in the North East are most likely to give their young children an allowance (65%), whilst children in the West Country are least likely to receive pocket money, with just four in ten (39%) of their parents giving them an allowance
- 48% of parents with children under 16 did not give them pocket money, or an allowance in the last six months.
Saving for the Future
- 41% of parents with children under 16 made regular payments into their child’s savings account in the last 6 months, which is encouraging given figures from March 2006, which showed that as few as 27% of parents were saving for their children’s future2.
- Fathers are most savings conscious, as 45% are regularly paying into their child’s savings account compared to 39% of mothers.
Karl Elliott, 3GB spokesperson for Engage said:
“With today’s children facing increasing costs of university and living when they reach adulthood, it is important that parents make an effort to prepare them for the financial challenges of adulthood. However, the choice between treating children today and giving them a helping hand in the future can be a fine balance.”
“Giving younger children pocket money not only helps to educate them about the value of money, but also teaches them important life skills such as saving and budgeting. On the other hand it is also important that parents invest money for their children’s future. By contributing little and often to Government Child Trust Funds, parents and other relatives could save a useful sum, tax free, to help their children get a foot on the ladder when they reach adulthood.”
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://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 financial provision.