OneFamily

That’s so unfair! Covid-19 hits teen finances by £156 million – but they’re doing more housework

Posted in: Corporate

  • The pandemic has hit UK teenagers’ finances by nearly £156 million in the last year due to lost pocket money and cash for chores
  • One in five (21%) parents also had to reduce or stop payments into savings accounts for their teen
  • Parents cite Covid-19 related financial pressures (43%) for a drop in pocket-money – meanwhile, almost a third of teens were furloughed from part time work
  • Over a quarter (26%) of parents say their teens have taken on more chores over lockdown than their partner.
  • 70% have hoovered, 63% cleaned the kitchen, 22% fixed tech problems and 21% have helped with home-schooling.

The value of pocket money has plummeted over the past year for teens, as the pandemic saw £156m less being handed out by parents – or a drop of £5.40 per person each month1.

This is according to research from financial services provider OneFamily, which suggests that the overall value of pocket money handed out decreased by £129.3m in the year since the pandemic began2, while cash for household chores decreased by £26.9m3. Overall, this represents a 9% decrease in the total money being transferred to teens4.

A key reason for parents reducing pocket-money is children not needing as much money given the restrictions in place (50%), but 43% say that they could not afford as much given Covid-19 pressures.

Compounding the issue, teens are also getting less money from their jobs, with around 31% being furloughed, and a further 23% say they have earned less money5.

Even as the amount of money given for chores drops, teens have been picking up plenty of slack around the home as the pandemic changed family dynamics. In fact, more than a quarter of parents (26%) say their teen has taken on more chores than their partner during the pandemic.

In terms of the types of chores children have been helping their parents with, hoovering (70%) is at the top of the list, followed by cleaning their room (66%), with doing the dishes and cleaning the kitchen (63%) in third place.

But new tasks have also crept in during the pandemic, with a fifth of teens fixing technology at home (22%) and helping to home-school siblings (21%) as the nature of chores evolved. And given that families are now sharing the same space they live and work in, almost half (49%) of parents agreed that it helps them keep a smooth relationship with their partner if their child picks up household tasks.

Interestingly, when it comes to the form of payment, while cashless payments have seen a boom6 during the pandemic in order to reduce contact and contamination, over half of parents (56%) have still given their children their pocket money and chores incentives in cash7.

When it comes to putting money away for children, one in five parents (21%) who have savings accounts or Child Trust Funds for their children decreased or stopped payments over the past year8. Again, the financial hardship encountered during the pandemic is a key reason for around half of parents (47%).

As a result, a third of parents (33%) are worried that their teen’s savings account will be stunted, following a difficult year. Meanwhile, a further 18% decided to sacrifice their own savings in order to put money away specifically for their children in the past year.

Paul Bridgwater, Head of Investments at OneFamily, said:

“It does feel like the last year has been especially hard on our teens, they’ve lost out financially and they’ve also had to take on more jobs around the house.

“It’s been a challenging time, and many parents have been hit hard financially by the pandemic. This naturally means a knock-on effect for teenagers and represents more money pressure on parents.

“Whilst saving money in the current circumstances can be hard, even putting a small amount aside for your children into their child trust fund or a junior ISA account each month can make a really big difference. It’s a great way to start a lifelong savings habit and over the years it can build into a nest-egg that will give them a head start in their adult life.”

OneFamily is one of the UK’s largest child trust fund providers.  To find out more about children’s savings products please visit onefamily.com/child-trust-fund or onefamily.com/junior-isa

For more information please contact:

Jo.gilham@onefamily.com or telephone 07825 349 779.

Notes to Editors

Unless otherwise stated, all research conducted by Opinium, on behalf of OneFamily, between 29th January and 1st February 2021, among a nationally representative sample of 1,003 UK adults aged 18-30

  1. OneFamily research, conducted via Opinium found 77% of parents of teenagers said they have given their children general pocket money and 16% have given their children money for chores/tasks.

    ONS data says there are an estimated 5,183,386 13-19 years-olds in the UK. The 77% of this group receiving pocket money is the equivalent of 3,991,207 people and the 16% of this group that is receiving money from chores is 829,341.

    Parents gave their teens an average of £32.80 pocket money and £25.70 for chores in 2020, this decreasing by £2.70 for each of them in 2021, to £30.10 and £23.00 respectively.

    With each member of these groups receiving £2.70 less on average in the past 12 months, this equates to £10.7 million less in pocket money and £2.2 million less in money earned from chores each month – this is £13m per month or £156.2m when multiplied by 12 to represent a full year.

  2. As in footnote 1, 3,991,207 teens receive pocket money. Parents gave their teens £32.80 pocket money in 2020 and £30.10 in 2021 – a decrease of £2.70 per month. This equates to £10.7 million less in pocket money per month across the population, which when multiplied by 12 to represent a full year, equates to £129.3m lost.
  3. Parent gave their teens £25.70 money for chores in 2020 and £23.00 in 2021 – a decrease of £2.70 per month. With 829,341 teens receiving money for chores, as in footnote 1, this equates to £2.2 million less in money earned from chores each month. When multiplied by 12 to represent a full year, this equates to £26.9m.
  4. With the total amount given to teens across chores and pocket money given in January 2020 averaging £58.50, and the total amount across chores and pocket money given in January 2021 averaging £53.10, this represents a 9% decrease over a year
  5. Teenagers have been asked the following: Thinking about how much you earnt from your job in 2020 overall, did you earn more or less compared to how much you earnt in 2019 overall? 23% have selected “I earned less money in 2020 than in 2019”
  6. How COVID is turning the UK cashless, Finextra article from 25 September 2020
  7. Parents have been asked the following: In what form do you give your child aged 13-19 their pocket money? If you use multiple methods, please select the one you use most often; 56% selected “I give it to them in cash e.g. coins, notes”
  8. In total, 71% of parents have some kind of savings account, JISA or Child Trust Fund for their child, with 21% of this group having either paid less into their child’s savings account or stopped paying money in altogether in the past 12 months.