Sweet Sixt££N: 86 Per Cent of Parents Feel Too Much Financial Pressure Over School Prom

Teeth, tans, limos and pre-parties lead to £165 average cost of celebrating end of school days

29 June 2015

Making the school prom a night to remember is placing increasing pressure on the bank of mum and dad, according to new research from Nationwide Building Society.

The culture of school proms has taken the UK by storm in recent years, having been adopted from America, where it has long been a significant, and potentially expensive, occasion.

And with the costs soaring, Nationwide is reminding parents to plan ahead and consider opening a youth current account for their children in order to help them save towards the big day. Nationwide’s FlexOne current account, which is available to those aged 11-17, is the most highly rated youth account according to Which?, and offers access to an exclusive FlexOne Regular saver paying 3.50% gross p.a./AER*. The account, which is completely fee-free, provides a range of benefits including 25 per cent discount off Vue cinema tickets and dedicated financial support and help via a 24/7 Twitter service.

The poll, which surveyed the parents of children due to send a child to a prom this year and those whose children have attended a prom in the last two years, shows the average spend is £165, with seven in ten (72%) spending more £100 or more. However, the figures show nearly a third (30%) spend in excess of £200.

It appears that the need to impress at the school prom is beginning to stretch parent’s finances to the limit, with more than eight in ten (86%) stating that there is now too much pressure to spend considerable money on the occasion. This compares to just six per cent who think that there isn’t too much pressure.

And it’s not just new clothes parents are buying, although two thirds (67%) do splash out on buying or hiring outfits. Around four in ten (39%) pay out for transport – with 42% of those arriving in style in a limousine, while 18 per cent will book a taxi.

Almost half (46%) get their hair cut or styled and one in ten get a spray tan. One in five polled said their children either hosted or attended a pre-prom party, while one in 20 got their teeth whitened.

The full breakdown of parents’ prom spend includes:

  • Clothing: 67 per cent
  • Shoes: 54 per cent
  • Hair: 46 per cent
  • Transport: 39 per cent
  • Accessories: 27 per cent
  • Spending money: 24 per cent
  • Pre-prom party: 22 per cent
  • Beauty treatments: 20 per cent
  • Photography: 16 per cent
  • Spray tan: 10 per cent
  • Gifts for prom partner: 6 per cent
  • Teeth whitening: 4 per cent
  • Nothing/I'm not sure yet: 3 per cent
  • Other: 1 per cent

Phil Smith, Nationwide’s Head of Current Accounts, said: “The recent popularity of American style school proms has the potential to hit parents financially if they are not prepared. Family life can be expensive enough without being broadsided by additional pressures. For those parents intending on planning a big day for their son or daughter, we would suggest perhaps saving into a ring-fenced account. Either way, we would always advise sticking to a budget and managing expectations at the outset, lest the costs spiral out of control. That might mean also managing any teenage tantrums, but hopefully that will be a passing phase!”

“It is also worth considering your child opening their own current account so they can start managing their money and saving towards the things that matter to them. Our FlexOne account is completely fee-free and provides a range of competitive benefits to suit the lifestyles of young people. Having a current account is a great first step towards financial independence and an ideal way to encourage children to start putting money towards something that is special to them”.

Notes to Editors:

One Poll research: total sample size was 750 adults, who have at least one child who is going to prom this year or who has been to prom in the last two years. The survey ran from the 16/06/2015 to 19/06/2015.

* AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest were paid and compounded once each year. The gross rate of interest is the interest rate payable before any income tax is deducted (if customers do pay tax).

¹ Customers aged 11 to 17 years old can apply for the account, but the account can be held up until the age of 23.

FlexOne Current Account

Account Eligibility

  • People aged 11 to 17 can apply for a FlexOne account, but the account can be held up until the age of 23.
  • The account is held in the sole name of the customer.

Account Operation

  • FlexOne can be opened online and in branch. The account can be operated online, in branch and over the telephone.
  • An adult must be present to open the account in branch for children under 16.
  • Applications can be made online for customers aged 14 and over.

Credit Interest

  • 1% AER on credit balances up to £1,000.
  • Credit interest is not payable on balances over £1,000.

Overdrafts

  • Aged 18, subject to status.
  • There are no overdraft charges on the account.

Cards

  • The account comes with a Visa debit card which includes contactless technology (a cash card is also available as an alternative).
  • Customers can switch between cards at any time under the age of 18.

Cash Withdrawals

  • FlexOne customers can withdraw up to £300 a day from a cash machine, as long as they have enough funds in the account or up to £500 over the counter in a branch.

Fees

  • The account has no fees or charges.

FlexOne Regular Saver

Availability

  • In branch and online.
  • To open a FlexOne Regular Saver, customers must hold a FlexOne current account and be aged 11 to 17 years old. Once opened, the account can be held up to the age of 23.

Account Operation

  • Account can be managed via Nationwide’s Mobile Banking app, Online Bank or via the FlexOne current account (ATM and in branch).
  • Minimum opening and operating balance is £1.
  • Maximum balance increase of £100 per month. Therefore, customers can deposit up to £100 and replace any money withdrawn in the calendar month; for example, if £50 is withdrawn, a total of £150 may be deposited in that month.

Interest

  • Calculated daily and paid annually on 31 December.

Maturity

  • When the account holder reaches 23, the account will be transferred to a Nationwide Flexclusive Saver account (or equivalent instant access account).

About Nationwide

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 customers.

Customers can manage their finances in a branch, via the mobile app, on the telephone, internet and post. The Society has around 18,000 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.

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