‘Kidflation’ continues to hit children in the pocket
‘Kidflation’ continues to hit children in the pocket, according to research from Santander Credit Cards, which reveals that the rate of inflation for goods and services most commonly bought by children has risen at a rate two-thirds (68 per cent) faster than inflation (RPI) over the past year.
Santander analysed the rate of inflation on goods and services typically purchased by the UK’s 10-16 year-olds and compared it with the rate of inflation for all goods and services. It discovered that ‘kidflation’ drove up the price of goods routinely bought by children by 4.7 per cent between June 2011 and June 2012, compared to just 2.8 per cent for products and services in general, meaning children continue to be significantly worse-affected by the rising cost of living.
Kidflation has now risen 19.7 per cent in the past four years compared to just 11.7 per cent for products and services in general.
Alan Mathewson, CEO of Santander Cards, said: “Everyone tends to focus on the impact of inflation on the adult world but often we overlook the effect on children. The costs of everyday purchases made by children have been rising at a rate that significantly exceeds that of inflation in general, and children are also heavily affected by the reduced amount of money being spent on them by their parents because of difficult financial circumstances.”
In the past 12 months children have experienced the following price hikes:
5.6 per cent increase in bus fares
5.0 per cent increase in the cost of entertainment
4.7 per cent increase in telephone costs, including mobile phones and text messages
4.3 per cent increase in the cost of sweets and chocolates
3.9 per cent increase in the cost of soft drinks
3.5 per cent increase in the cost of children’s clothing.
Cutback on the kids
Further findings from Santander show that children of this age receive an average of £9.08 a week pocket money, but 17 per cent of parents don’t give their offspring any pocket money at all.
However, more than a third of parents (36 per cent) say they have reduced their children’s pocket money in the past year – up from 23 per cent in 2011 – due to difficult financial circumstances, half of whom (18 per cent) are now making them earn it by carrying out chores in the home, up from 13 per cent in 2011.
The effect of reduced pocket money also means less going into savings, with fewer than two in 10 parents (17 per cent) saying their children put money in the piggy bank at home, and fewer than one in 10 (9 per cent) say their children put pocket money in a savings account.
The study also reveals that more than three quarters of parents (77 per cent) have been forced to cut back in other ways that have affected their offspring in the past year. Half of parents (48 per cent) have gone on fewer outings as a family and 41 per cent have spent less on holidays or stopped going on them altogether.
More than a third (36 per cent) of parents have bought fewer toys and games for their children and 33 per cent have reduced the amount they spend on their kids’ birthday or Christmas presents.
Santander’s ‘123 World’
The Santander 123 Cashback Credit Card is one of a series of great initiatives from Santander designed to reward customers and help them save money. The card pays up to 3% cashback on household spend and has paid over £10 million in cashback to customers since its launch in September 2011. In addition Santander also offers its unique ‘123 Current Account’ which pays cashback on all utilities, council tax, Santander mortgage payments and communications direct debits set up on a customer’s account, as well as paying in-credit interest on balances up to £20,000. Santander is also driving down the cost of car insurances and offering to beat car insurance renewal premiums by 20% for Santander 123 current account or credit card customers or by 10% for all other Santander customers.
Santander also provides a simple to use online calculator which customers can personalise to their own household bills and spending to see how much they could save in a year.
For more information, visit santander.co.uk.