Kids get pocket money pay cut as cost of living cripples families' outgoings

Last modified on Wednesday 5 January 2022

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As the cost of living goes up, down comes the amount of pocket money given to kids

The average amount of pocket money being given to kids has dropped to its lowest since 2001, according to research.

So if you're thinking of implementing a pay freeze, or slashing the amount dramatically, you're far from alone.

The research carried out by Halifax revealed a third of parents have had to decrease the amount they've dished out to their children throughout the past year.

It says the average amount kids under 16 are receiving per week has decreased by 23%, from £6.48 in 2021 to £4.99.

Which is no surprise, given the squeeze on all our finances at the moment. Energy prices are still high and food prices are rising according to the Office for National Statistics .

One quick way to spend less is by shopping at Aldi. Not only was it the cheapest supermarket of 2022 according to Which? , but many of our Netmums swear by the cheap prices, Super Weekly Offers and bargain Mamia baby range .

What are the benefits of pocket money for kids?

While many families will have stopped giving pocket money out completely, the research found two fifths of parents are continuing to give it to their kids. A third of parents asked say they're getting their children to help more around the home in exchange.

Here are just some of the benefits of giving your kids pocket money, if you're able to:

1. It teaches your children to save

Open a savings account for your kids so they get into the habit of putting their money away, rather than spending it immediately. This teaches them about saving up for what they want.

Chat to your child about what they want to save up for, a gaming console for example. Then search together for the best deal, and work out how they can save up for it. For example, if they save up half, you could offer to cover the rest.

As a rule of thumb, 10-20% of their pocket money is a good amount for your kids to save.

2. Your kids will learn the value of money

When children are given the independence to buy things themselves, they become more aware of how much things cost.

And this not only means they begin to see the value in the things they already have, they’ll also be more aware of shopping around for good deals.

Getting them involved in your weekly shop is a great way to teach your kids about finding the best deal. For example, Aldi 'swap and saves' can save you up to £250 a year on baby supplies .

And your kids will love the Specialbuys , instore and online, where they can pick up bargains. Got teens in the house? A recent SpecialBuy was the viral Prime Hydration Drink, at just £1.99 a bottle.

So it's DEFINITELY worth a look ...

3. It teaches your kids to budget

Another advantage of giving pocket money is that gives children valuable experience in managing their financial affairs.

It's easy to assume that all kids will just fritter their money away but you may be surprised to find your child is quite astute and quickly realises the power of saving.

As your children get older they could start to be given control over things that matter to them. So you could say you’ll give them a set amount and for that they have to buy their own clothes for example. If they blow their pocket money then they’ll learn they have to wait until the following week or month when they get their next allowance.

4. It could work out cheaper for you

If you sit down and actually add up how much you hand out to your child each week for things like comics, sweets, toys, entertainment, you'd probably be surprised at what it all amounts to. (Top tip: switching to Aldi could see you pay less on treats for the kids, so why not give it a go).

Giving your child a set amount each week can work out cheaper ... as long as you abide by the 'once it's gone, it's gone' mantra.

So how much pocket money should you give?

If your children are reading this, chances are this section is the bit they are MOST interested in …

So how do you decide how much pocket money to give?

According to the GoHenry Youth Economy Report 2022 , the average weekly amount of pocket money depends on age.

  • 7 year old: £3.52
  • 8 year old: £3.75
  • 9 year old: £4.12
  • 10 year old: £4.58
  • 11 year old: £5.34
  • 12 year old: £6.49
  • 13 year old: £8.09
  • 14 year old: £9.70
  • 15 year old: £11.54
  • 16 year old: £13.32
  • 17 year old: £14.52
  • 18 year old: £14.79

However, panic not as these amounts are averages and just a guideline. How much you give your child (if any) is entirely up to you.

In our Forum , many mums say they give their children £5 a week, with some paying their child’s mobile phone bill on top of that if they are older.

Before setting an allowance, things to consider include:

  • How old your child is.
  • What you are expecting them to do with the money. For example, are you expecting them to use it to buy their own toys or games?
  • Your own weekly budget: don’t feel pressured into giving your kids too much if it’s simply not affordable.

Should you give your kids pocket money in return for them doing chores?

It's a tricky one! Teaching your kids to understand the value of money is a vital life lesson. Which is why giving them chores to do in order to ‘earn’ their pocket money can be a good tactic.

But some daily tasks, like setting the table or washing up, are a normal part of family life so you might not want to 'pay' your child to do these. Some parents give their kids bigger jobs, like helping wash the car, as ways to earn pocket money.

How much pocket money do you give your kids? Why not share your own pocket money tips in our forum, below.

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