Pocket money rises 600% in 20 years

Children receive an average of £8.01 per week in pocket money, an increase of over 600% since 1987, according to new research from Halifax's 20th Anniversary Pocket Money Survey. Halifax, the UK's largest savings provider, has been conducting research into children's pocket money since 1987.

While the average weekly pocket money has fallen compared with last year's figure of £8.20, it is more than seven times the 1987 average weekly pocket money of £1.13. This means pocket money has increased by six times the rate of inflation, as RPI has risen by 99% over the same period.

Pocket money levels experienced the highest level of growth at 105% between 1998 and 2000 from £1.76 to £3.60. However, pocket money levels also decreased in 1994, 1996, 1997, 2006 and 2007.

The average UK weekly pocket money is £8.01 – This is down 19p per week (-2.4%) compared with the average of £8.20 in 2006, but £6.88 more per week (609%) than the £1.13 children received in 1987.

Children in the South East are this year's pocket money 'winners' – Children in the South East of England receive an average of £10.43 per week, compared with £8.03 in 2006. Children in London who received the most pocket money of £11.71 per week in 2006, now receive £8.16, a decrease of 30.3%. Children in the East of England enjoyed the largest rise in pocket money, from £6.64 in 2006 to £9.40 in 2007, an increase of 41.6%. This was followed by a 34.2% increase for children in the North West, from £7.25 per week last year to £9.73 in 2007.

Children in the North East are this year's pocket money 'losers' – Children in the North East of England received the least pocket money this year, with an average of £5.70 per week, or almost 29% below the UK average of £8.01. Children in this region have also seen the largest fall in average pocket money since last year across the whole of the UK - 31.2% compared with an average national decline of 2.4%. Wales, the West Midlands, South West and Yorkshire and Humberside also have pocket money levels below the national average.

Children in the South West miss out – In 1987, 71% of children received pocket money and in 2007 seven in ten children (70%) say they receive weekly pocket money. Children in the North East and Yorkshire and Humberside are most likely to get pocket money (77% and 75% respectively), while those in the South West are least likely to receive it (52%).

Girls are more likely to receive pocket money – 71% of girls get weekly pocket money, compared with 68% of boys, although boys receive more per week (£8.02, compared with £7.99 for girls). This is the reverse of last year's situation, when girls received an average of £8.66 per week, compared with £7.72 for boys.

Older children get the most per week – Children aged between 12 and 16 receive an average of £9.53 per week, compared with £6.41 for those aged seven six to 11. Older children are also more likely to get weekly pocket money (71%, compared with 68% of younger children). Girls aged between 12 and 16 receive more pocket money than their male counterparts (£9.73, compared with £9.32), but this trend is reversed for younger children, with boys aged seven to 11 receiving £6.68 per week, against £6.14 for girls in this age range.

The allocation of pocket money varies with age and gender:

Of those that get pocket money, over three quarters (77%) receive it from their parents Children aged 12 to 16 are more likely to receive pocket money from their parents (84%), compared with those aged seven to 11 (70%). 31% of children receive their pocket money from doing jobs around the house and 35% of girls get paid for doing the chores, compared with only 28% of boys. Over two thirds of children (35%) earn their money from tidying their bedroom and cleaning their house and 32% by washing up. Older girls are also more likely to receive money for doing well at school or in exams. Some 22% of girls aged 12 to 16 are rewarded for academic achievement, compared with just 14% of boys in the same age group.

Pocket money increases throughout the year - Over six in ten children (63%) indicated that they have had a rise in pocket money during the year. 24% of children said their pocket money increases once a year, while 6% said that it goes up more than four times a year. More than a quarter (26%) said the timing of any increase varies, while 22% said their pocket money never goes up. Birthdays are the most common time for parents to increase the amount they give, with 33% of children receiving more as they get older.

Most children said they were not saving up their pocket money for anything in particular – 54% said they had nothing in mind to spend their savings on. In 1987, just 4% said they were not saving towards anything in particular. Of those who are saving up their pocket money, computer games and holidays are the most popular, with 10% of children setting aside money for these. Twenty years ago, before computer games were widely available, a third of children across the UK saved up for their holidays.

A generation of young consumers:

Children today have very different spending habits and tastes to their counterparts 20 years ago.

Changing tastes in toys over the past 20 years – In 1987 Sylvanian Families, musical socks, Tomy toys and karaoke machines were very much in demand. In 2007, children are most likely to spend money on sweets, chocolates and crisps (73%), drinks (63%) and going out (58%.)

DVDs, videos, computer games and equipment are in demand - Over the past year a higher proportion of children are now purchasing their own DVDs and videos (42% in 2007 compared to 33% in 2006) and computer games and equipment (42% in 2007 compared to 33% in 2006), which indicates the growing popularity of the Internet and gaming. Indeed, such equipment features quite highly amongst this year's 'must have' items for children; IPods, laptops, mobile phones, Nintendo DS, Nintendo WII and Playstation 3.

Appearance is important – Children are spending the most amount of money each week on clothes (£8.48), mobile phones (£6.76) and going out (£6.49.) While fashion today is very different to what it was 20 years ago, trainers are still as popular as they used to be. Nike Air running shoes were among the top sellers in 1987, although 49% of children today believe sportswear is overpriced. Cycling shorts were another fashionable item in 1987, as were 'smiley' faces, inspired by the acid house music scene.

The amount spent on items varies according to gender – Girls spend the most amount of money per week (£10.11) on clothes, compared to only £6.87 by boys. Girls aged 12 to 16 spend up to £11.97 per week on clothes, the highest of any category. In comparison, boys spend the most per week on computer games and equipment at £9.21, compared to only £3.39 spent by girls. Girls also spend more money per week on cosmetics and toiletries than men (£4.11 compared to £1.68.)

All items are more accessible to children this year – All items are perceived to be less expensive this year in comparison to last year. Designer clothes (69%), holidays and trips (67%) and IPods (66%) are cited as the most over priced items.

Mike Regnier, head of savings at Halifax, said: "Children's spending power has increased dramatically since 1987, with the average pocket money rising from £1.13 per week to £8.01, an increase of over 600%. This is well in excess of inflation, which has risen 99% over the same period.

"Part of the increase may be explained by changing tastes and technology. Whereas 20 years ago children spent their money on toys or saved towards things like holidays, nowadays children are likely to buy DVDs and mobile phones, which simply didn't exist in 1987."