10 December 2013
Children are getting 342¹ per cent more on top of their monthly money pocket allowance due to parents paying for ‘Out of Pocket Money’ extras, according to new research² from Nationwide Building Society.
Parents of children aged between 5 and 18 who give their children pocket money state they give each child an average of £31.64 pocket money per month. However, the Nationwide survey reveals that parents are, in fact, typically spending £139.87 per child per month once additional expenditure on extras is factored in.
So, on average, a total of £108.22 is spent per child per month on extras. This includes:
- £34.81 on extra-curricular lessons (e.g. swimming lessons, music lessons, dancing lessons)
- £14.48 on other clubs and societies (e.g. sports clubs, Scouts, Guides, after school clubs)
- £15.05 on non-essential technology (e.g. mobile phone credit, Smartphone apps, in-app purchases, music downloads)
- £24.42 on non-essential clothes and toiletries (e.g. make-up, aftershave, clothes for parties/evenings out)
- £19.46 on other non-essential items (e.g. going out with friends, hobbies, eating out)
The study also shows a surprisingly large gap between what is spent by parents aged between 25 and 34 compared to those aged 35 to 44. Surveyed parents aged 25-34 are likely to spend an extra £21.72 on pocket money than their elder equivalents. When the “Out of Pocket Money” extras are factored in, the difference rises to £67.14.
||Parents aged 25-34
||Parents aged 35-44
|“Out of Pocket Money” extras
Amounts are per child per month
Psychologist Dr David Lewis, author of How to Be a Gifted Parent, comments: “The main reason for this apparent ‘generosity gap’ between younger and older parents is most likely to be the differences in their own childhood experiences and expectations.
“Those aged thirty-five and over had mums and dads whose own parents grew up during the years of post-World War Two austerity, when children were raised with much greater awareness of the value of money.
“Younger parents, being closer in age to their children, may possess a greater affinity with the social and cultural pressures being experienced and may be more concerned than older parents for their child to regard them as a friend, rather than simply their parent. However, this could result in them becoming more vulnerable to feelings of anxiety and guilt if accused of being too stingy with pocket money.
“It is not that older parents are less generous than younger ones but merely that their own childhood expectations of what the bank of mum and dad should provide are different. Often with age and maturity comes greater confidence in their own parenting skills and less willingness to be taken on a guilt trip by demanding youngsters: they recognise that there is a world of difference between being a good parent and an easy touch.”
Richard Napier, Nationwide’s director for savings and mortgages, adds: “From our research it is clear that the bank of mum and dad is very much open for business. In addition to supplying the monthly pocket money, parents are dishing out extra funds that mean children are getting a 342 per cent increase on their pocket money every month.
“However, with the bank of mum and dad effectively supplying free money, parents are not taking advantage of a perfect opportunity to instil a sense of financial management into their children.
“It’s important that children understand that nothing is free in this world. If enough pocket money is given per month, parents will have ample opportunity to teach their children how to manage on a budget without compromising on that happy childhood.
“But it isn’t just about the here and now because understanding concepts such as saving, managing money and the impact of debt means they will be confident about their finances as they get older and hopefully have fewer money worries.”
Notes to editors:
¹ Percentage increase calculation made by Nationwide Building Society: £108.22 / £31.64 x 100 = 342%
² All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 12,145 adults, of which 1,108 were parents of children aged 5-18 who give their child pocket money. Fieldwork was undertaken between 16th - 28th October 2013. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).
About Nationwide Building Society
Nationwide is the world's largest building society as well as one of the largest savings providers and a top-three provider of mortgages in the UK. It is also a major provider of current accounts, credit cards, ISAs and personal loans. Nationwide has around 15 million members.
Customers can manage their finances in a branch, on the telephone, internet and post. The Society has around 15,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.