Children have received an above-inflation boost in “earnings” from parents and caregivers despite household incomes being pressured by rising costs.
NatWest Rooster Money, a savings app aimed at children, revealed that users experienced a 10.7 per cent increase in average annual incomes to more than £330 between March 2022 and February this year, above 10.4 per cent inflation over the same period.
Fewer children received regular pocket money each week, according to the findings based on data from more than 125,000 young people aged between six and 17. This was down 13.5 per cent in the period, as parents switched to one-off payments to mark special occasions.
“Faced with less regular pocket money, kids have been really entrepreneurial and proactive,” said Will Carmichael, chief executive of Rooster Money. He said children had sought out earnings from evening and weekend jobs as well as household chores.
Children’s spending and saving habits contrast with a decline in parent and guardian’s inflation-adjusted earnings growth as higher prices reshape how households manage finances.
Young people’s pocket money earnings grew by 11 per cent last year compared with nominal wage growth closer to 6 per cent for working people. This meant their financial independence was unencumbered by inflation; the survey data found they were spending mostly at supermarkets, fast food outlets and on video games.
On average children saved about 8 per cent of their money over the year, comparable to the adult household savings ratio of 8.3 per cent in 2022, according to the Office for National Statistics.
NatWest Rooster, which charges a monthly fee to users, and competitors such as GoHenry, Nimbl and Starling, offer parents control of their child’s spending using a prepaid card unlike a general current account. Debit cards linked to a child’s bank account are available from the age 11.
Babysitting, reselling clothes and tutoring all helped children boost their income. These side hustles accounted for some £50 of earnings outside chores, 16 per cent more than they did in 2021-22.
Source: Economy - ft.com
