London kids rock bottom of UK pocket money league

The East Midlands is England’s pocket money capital – children in the region are those most likely to be enjoying parental handouts this summer, whereas kids in affluent London come rock bottom of England’s pocket money league, according to new research from Engage Mutual.

The downside for kids enjoying pocket money this summer is that they could be the ones who are penniless in years to come. At a time when there is mounting concern over the nation’s savings gap, the findings from Engage Mutual reveal that areas where parents are most generous with pocket money also happen to be regions where parents are least likely to save for their child’s future. Conversely, regions where parents are tightest with pocket money are places where parents are most active in squirreling savings away for their child’s future.

The findings are from the latest edition of Engage Mutual’s 3GB study - an ongoing probe into family finance commitments between the generations – children, parents and grandparents. Engage Mutual asked 2,000 parents how they financially supported their children.

Whilst the proportion of parents giving their children regular pocket money or an allowance (48%) remains at a similar level to last summer, the proportion of parents regularly saving for their child’s future (32%) is at its highest level for over a year. Mothers are a substantial driving force behind this savings culture (31%).

Beyond giving pocket money or a summer allowance, contributing towards higher education costs (11%) and driving lessons (10%) are the next most common financial commitments among parents.

Parental attitudes in Wales and Scotland presented interesting contrasts to trends in England. The findings for Wales and Scotland are stories of extremes. Compared to England where parents tend to either save or give pocket money, Scottish and Welsh parents were consistent on both fronts. In Scotland, parents were among the least likely to give pocket money (37%) or to save (30%), whereas in Wales, parents were among the most generous on both pocket money and child savings (66% and 40%).

At a time when a growing number of children grow up in single parent households, the research reveals that children from single parent homes do not suffer when it comes to having pocket money (47% of children getting a regular allowance, compared to 49% of children that live in two-parent homes).

The cost of financially supporting children is not something that ends when a child leaves home. Engage Mutual’s research revealed that 26% of parents with children over 25 claimed they were still giving their children pocket money or an allowance.

Karl Elliott, 3GB spokesperson for Engage Mutual commented: “In a credit card society that is driven by a have-it-now culture, it is pleasing that so many parents are saving for their kid’s future and those children in areas where parents are the tightest on pocket money will thank them in years to come when they enjoy the benefits of a healthy, matured savings fund.

“As a national leader in Child Trust Funds, we are committed to providing simple, no-nonsense savings products that make it easy for parents to save little and often. We’ve also looked into what we can do to help children that missed out on the CTF and will be launching our new tax exempt Easy Save product for them later this summer. This product provides an opportunity for parents to save for their children’s future.”