Pocket money all adds up â€“ in fact, our latest survey found that parents in the UK give their kids a combined total of ÂŁ2.68 billion every year!
According to the poll, children under 16 get an average of ÂŁ3.94 per week, with around one in five parents believing their children should help out with chores to earn their allowance. Older kids tend to receive more: we found each year, kids can expect to see a 10% increase in their earnings.
Pocket money â€“ How much, how often and when?
The pocket money issue can be a contentious one among parents. Some give generously, others â€“ with some justification â€“ think they already spend enough on their kids, and if they want their own cash they should get a part-time job or at least help out around the house.
The problem can get thornier when you have more than one child: should you give them all the same amounts, or treat them differently according to their age? And at what age should children start receiving pocket money, anyway?
According to research from the Money Advice Service, children tend to form their money habits as early as age seven, so this could be a good yardstick for when to start giving pocket money.
Of course, thereâ€™s no right answer for everybody â€“ itâ€™s up to your own judgement and priorities. But for many parents, it comes down to what they want to teach children about work, finances and responsibility. If youâ€™re always the one who spends money for them, it doesnâ€™t leave them with much scope to learn!
Most would agree making children save up for something they really want teaches them good habits. You might want to go a step further and open a savings account for them: theyâ€™ll need to understand how banks work sooner or later, after all.
When it comes to chores, one approach is to give children weekly pocket money in return for doing standard chores around the house – setting the table and washing the dishes, for example â€“ and offer them the chance to earn extra money by doing things like washing the car.
Our research found that 6 to 11-year-olds can expect to get an average of ÂŁ3.14 per week, while from 12-16 this more doubles to ÂŁ6.71. And this might be a fair reflection of the different priorities kids have at different ages: younger children tend to spend on toys and sweets, while older kids tend to want things like books, music, games â€“ and of course, a bit more independence.
As kids get older, you might want to change their weekly allowance to a larger monthly one. This will help teach them to manage money over a longer period of time, while also giving them the flexibility to occasionally spend more at once when they need to.
Top pocket money apps
Pocket money can be a good way to teach children about the value of money from an early age, but it can also be tricky to keep track of. However, there are many handy apps out there that can help you and your kids manage pocket money!
Here are a few of the most popular ones and what you can do with them:
Targeted at kids aged six to 18, goHenry lets you set a weekly allowance along with tasks they can complete to earn extra money.
When you sign up for the app, youâ€™ll receive an online account and a pre-paid debit card in the post â€“ and since only the money on the card can be spent, thereâ€™s no need to worry about debts or overdrafts. The card works at ATMs, online, in high street shops and abroad.
You can set individual weekly and spending limits, and keep track of your childâ€™s spending via app notifications. On their side of the app, kids can view their finances and set savings targets to work towards.
Osper works in a similar way to goHenry: kids get an app and a linked prepaid debit card, and parents can add funds to the account, set regular top-ups via direct debit and keep track of how their kids are spending their cash.
Allocating funds to the account is quick and easy, and the first six top-ups in a month are free (after that, thereâ€™s a 25p charge per transaction). The same goes for withdrawals and balance checks at ATMs â€“ itâ€™s always free to check using the app, though.
For kids, the app has many of the same features as goHenry: they can set budgets and save toward goals, and see a detailed overview of their spending so they can understand where their money goes. One useful feature is the ability to sort their spending into categories â€“ for instance, snacks and drinks, books and music, clothes and so on â€“ which makes it easier to see where theyâ€™re spending too much!
RoosterMoney is a digital pocket money tracker, so unlike goHenry and Osper it doesnâ€™t come with a debit card service. However, it is a simple and engaging way to teach kids as young as four about the value of money.
Parents can add as many children as they like to the app, and can track how much theyâ€™ve given to them and why â€“ whether itâ€™s a regular allowance, a present or a reward for a job.
Meanwhile, kids can cost up the items they want and see their progress toward saving up for them on a bar chart. Other handy features include a â€śsafeâ€ť option for long-term saving, and a â€śjobsâ€ť section where you can list the tasks your kids need to complete to earn money.
December 22, 2017