The latest pocket money survey revealed that the average amount children received weekly was £7.55. Yet, despite their parents’ efforts, nearly one in five (17%) kids report not saving any of it. Of those who are saving, 16% save all of their pocket money, potentially worth over £30 every month. 20% save at least three quarters, and 29% save half.
In lockdown, video games top the list of children’s savings wish lists, with over a third reporting that to be their goal. 28% have set the goal of buying new clothes and 23% save for new toys.
A significant number of children also believe they have the capacity to save more but chose not to do so. A quarter reported that they had extra cash which didn’t go into savings with 22% admitting they shouldbe saving more. A third of children were happy with the current amount they save.
Emma Abrahams, Head of Savings at Halifax, said: “Encouraging children to save from a young age is incredibly important, not least to encourage an understanding of the value of money, but to create an early positive relationship with managing finances.
“Many parents have used lockdown as a time to talk to their kids about saving and one of the best ways to create engagement is by setting tangible goals. By creating something visual like a savings chart or using a piggy bank, your child can see their wealth accumulating towards the item at the top of their savings wish list.”
Just 15% of children turn to borrowing if they do not have enough money to meet their goal and for over eight in 10 (84%) that means asking the Bank of Mum and Dad. Just two-thirds of kids actually manage to pay the money back.
Parents saving for the future
Just under two thirds (64%) of parents save on behalf of their child with most starting when their offspring is just four years old. The average parent saves £34.27 a month on average.
Nearly half (44%) save towards children’s future education, 35% for holidays, and 35% for a rainy day.
Five tips from Halifax for talking to your children about money
1. Encourage the savings habit from a young age
Use a piggy bank or savings jar to make savings fun.
2. Get them to manage their money
If you can afford to, teach kids to manage their money by giving them regular pocket money and allow them to make financial decisions.
3. Open a savings account
This will help children understand about saving, interest, and how to manage an account.
4. Talk to your children about bills
When you receive bills, this can be an opportunity to explain all the different things that cost money and how you use your earnings to pay for it.
5. Get your children involved in managing the family purse strings
Get them to help with the weekly shop and build an appreciation of the cost of everyday items.