Teenagers add £1.7 billion to UK economy each year

Teenagers are adding £1.7 billion to the UK economy as they spend their earnings and pocket money.

This is according to the Teenage Finance Report from financial services providers OneFamily, which investigates teens’ attitudes towards money. The report reveals that the average teenager spends £54 a week, ranging from £13 at age 13 to £68 at age 19 – the equivalent of 60 per cent of their income. The remaining 40 per cent is mainly saved on a short-term basis to pay for more expensive items or holiday spending money.

The retail sector is the largest beneficiary of teen spending, with 84 per cent of expenditure going towards clothing, socialising (eating out, meeting for coffee, cinema, gigs etc.), food and gaming – although boys spend six times as much as girls on consoles, accessories and games. In total, this adds up to £7.4 billion, of which £1.7 billion translates into economic output.

While you might expect teens to do little in the way of planning and keeping track of their money, teens are actually very sensible with their spending. One in four (26%) keeps a monthly budget, and many are extremely conscious of getting value for money, with two in five (38%) shopping around for the best deals.

When it comes to the latest ‘must-haves’, one in five (22%) teens say that they often buy things second-hand through sites like Depop, Facebook Marketplace or eBay, with half (49%) saying it’s cool to get good bargains. While many (48%) shop second-hand because it means they can spend more on other things, a quarter (27%) opt for this approach because it is more sustainable.

These money conscious teens also take an encouraging approach to saving, with four in five (81%) teenagers saving some money every month, albeit mostly on a short-term basis; the majority (59%) have never saved up for more than six months at a time. With the first round of teens with a Child Trust Fund gaining access to their accounts from September 2020, it is reassuring that more than a quarter (27%) are saving up for a specific goal.

Nici Audhlam-Gardiner, Managing Director of Child Savings at OneFamily, said:

“Many teens have big expectations, so it’s important for them to get into the habit of saving from an early age and learn how to be responsible with money. From September 2020, the first Child Trust Funds will mature, in many cases delivering upwards of £1,000, so it’s reassuring that so many young people would put at least some of this money towards their futures.

“Helping teenagers to set aside a certain amount each month will not only give them a lesson in budgeting but will also teach them the value of the items they’re buying.”