The cost of living crisis is forcing parents to cut back on the amount of pocket money they give their children - with research showing it now stands at its lowest level in more than 20 years.
Almost one-third of parents say they have cut back on pocket money over the past year, with the average amount going into the pockets of under-16s each week dropping by 23% to £4.99. This compares to £6.48 in 2021, according to research from the lender Halifax. Two-fifths of parents say they give pocket money to their children, with a third of them expecting their offspring to do jobs around the house to earn it.
However, while parents have reduced pocket money, many said that they were prepared to make changes to their lifestyles to continue giving their children money, with half of parents saying they would sacrifice spending on their own leisure, such as going to the pub or eating out, or forgoing purchases such as makeup and designer goods (45%). Just over two-fifths said they would stop spending on their own hobbies, and a quarter would spend less on the weekly supermarket shop.
Emma Abrahams, the lender’s head of savings, said: "As household costs continue to rise, some parents are having to make difficult choices as they adapt to the conditions they face – from cutting down the family grocery bill, to passing on date night, or that much-wanted personal purchase at the shops.”
Children are spending their pocket money on video games and sweets (both at 39%), followed by toys (30%), clothes (29%) and hobbies, for example books (28%). Only a fifth of parents (22%) say their children are most likely to save their pocket money.
Halifax interviewed 629 parents of children aged eight to 15 in June. In 1987, when the lender undertook its first survey, children received an average of £1.17 each week. The amount remained relatively stable throughout the 90s before doubling between 1998 and 2000. As interest rates rose, pocket money followed suit – but dropped during the financial crisis, from £8.01 in 2007 to £6.13 in 2008. It rose to £7.71 by 2019, before falling back again during the pandemic to £7.55 in 2020 and £6.48 in 2021.
