Recession teaches children tough lessons about money

Children have been strongly impacted by the recession, according to research from YouGov commissioned by HSBC and the Personal Finance Education Group (pfeg).

Over a third of the children (34 per cent) interviewed have heard adults say they cannot buy something because of the recession more than once a week, whilst a quarter of them have actually reduced their own spending because of the recession.

The survey was unusual as it not only covered over 1,000 children aged 9 -10 but it also interviewed their parents as well.  The survey looked at children's understanding of money and was commissioned as part of the What Money Means programme, an initiative to expand financial education in primary schools.

The recession has reinforced children's good instincts about money: 80% say they would save up to buy something rather than get into debt, and over half said that if they were given £20 they would choose to save some of it.

Children see cutting back on luxuries as the best way to handle the recession: Nearly half think their family should cut back on toys and trips out.

Although children were very protective of healthcare and services for the elderly, over 60% of them think the government should cut spending on the 2012 Olympics.

Four-fifths of parents think it is important to have financial education in primary schools. 29% of parents say that they talk to their children about money more because of the recession.

Children want to use money to learn: half see books and computers as necessities. Over a third (34%) saw their mobile phone as a necessity, whilst iPods, trips out and new clothes were seen as luxuries

Only 26% of parents are feeling more optimistic about the economy than this time last year

Commenting on the survey, Wendy van den Hende, Chief Executive of pfeg, said: "The survey shows that children have very good instincts towards money and they seem to be natural savers. This does not always last into adulthood, which is why we are working to improve financial education in schools to reinforce these instincts. It is good to see that parents also agree that this is important.

‘We believe that What Money Means has made a real difference. Children learn the value of money, the dangers of getting into debt and the basics about the banking system. Whoever wins the next election, and whatever happens to the economy financial education needs to be kept on the agenda.'

Peter Bull, Head of HSBC in the Community, which supports the What Money Means project, said: ‘It is very reassuring to see that many children want to save rather than get into debt. However there is a danger of children picking up bad habits from adults.  HSBC actively supports financial education at an early age because it can reinforce children's better instincts.'