It pays to be the oldest child
- First-born children receive nearly £760 a year in pocket money compared with just over £565 for the second-born
- But they work hard for their money, as three quarters of parents link pocket money to chores and good behaviour
- Parents and grandparents spend on average over £213 million a week giving pocket money
New research1 from Charter Savings Bank shows it pays to be the oldest child when it comes to pocket money from parents and grandparents. Its study found first-born children receive an average £760 a year from parents compared to £567 for second children – a 34% pocket money pay rise. Grandparents also pay more to first born grandchildren, giving them £524 a year which is 11% higher than the £473 for their second grandchild.
The nationwide study reveals that on average, parents and grandparents across the UK collectively spend over £213 million every week giving pocket money to their children and grandchildren - the equivalent of £11.1 billion per year.
This pocket money pay-out works out as £14.61 a week from parents for first-born children and just under £11 for second-born children. Grandparents will give their first-born grandchildren just over £10 a week and second-born just over £9. First-born children receiving pocket money from parents and grandparents can expect £1,284 a year compared with £1,040 for second children and £971 for third children.
It is, however, a difficult job for parents and grandparents to decide how much pocket money to give. The two key deciding factors are whether it’s a fair amount of money for the age of the child (59%) and how much they can afford (36%). On average, children start receiving pocket money from their grandparents at the age of four and their parents at the age of five, the research shows.
Amount of pocket money given to children by parents and grandparents
|Child / grandchild||Weekly pocket money from parents||Yearly equivalent||Weekly pocket money from grandparents||Yearly equivalent|
Pocket money is however not just handed out and is often used as a way of teaching children about money from a young age. Three quarters of parents (75%) and two thirds of grandparents (66%) expect children to have done something to deserve their financial reward, teaching a valuable lesson about working and earning money from an early age.
Parents reward their children for completing chores at home on a regular basis (36%), behaving well at school (29%) and behaving well at home (28%), while a quarter (24%) use pocket money to ensure children do their homework.
Another important financial lesson is the benefit of saving, and the research found that more than a third (36%) of parents and grandparents give advice to children about how to save up for what they want, while similar numbers (29%) insist their child puts some in a savings account or piggy bank. Almost a quarter (23%) find out what their child or grandchild is going to spend it on before handing the money over, while one in nine (11%) insist they spend it on something specific.
Paul Whitlock, Executive Director, Charter Savings Bank said: “It’s interesting to see that being the oldest child is beneficial when it comes to pocket money, perhaps because parents have more disposable income with their first child than they do with subsequent children.
“Whether first, second or third child, the total amount of pocket money they receive over a year can be significant, so it’s understandable that parents and grandparents want to encourage children to set some of this aside and learn how to save.
“Pocket money is an incredibly useful way to educate children about the importance of both hard work and saving. If children must complete chores before they’re given pocket money, they’ll start learning a positive work ethic from a young age; and encouraging them to save up for something will help teach good financial habits. Ultimately, saving is one of the most important financial lessons to learn for adults and children alike.”
1 Opinium conducted research among 2,009 adults living in the UK on behalf of Charter Savings Bank between 13th and 15th August 2019
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