Parent power: Pocket money

Is pocket money still a thing, and if so, how much should you give your child to get by? Here’s what you need to know

Saving for a rainy day and stowing shiny coins in a piggy bank have a delightfully retro flavour in a digital and tap-to-pay era. Not every parent is a fan of doling out money for nothing and the dilemma, if you do decide to pay up, is the right age to start, what to pay and how to deliver it. Consider the arguments before you dig deep.

These days, less than a third of parents give pocket money on a regular basis, according to the 2023/4 NatWest Kids’ Economy survey. It explored the financial goings on of over 300,000 children via its Rooster Money Pocket Money Index. The survey also found that pocket money had also gone down to an average £3.78 a week (a reduction of 10 pence).

That said, there are parents who are firmly in favour – not least since pocket money teaches a lot about the cost of things and the importance of saving. The hive mind of Mumsnet suggests pocket money from around age six, and there’s a popular formula of paying double their age per month (so £12 a month for a six-year-old and £24 a month for a child aged 12).

Big bonuses

While pocket money is still around, an increasing cohort of parents are less inclined to hand it out as a routine. Instead, they favour paying funds over as rewards – good behaviour and achievements, helping out with chores or engaging in entrepreneurial activities.

For children, there’s a specific value – beyond the money – in such rewards because they link bonuses to effort. While rewarding children for being good, reaching a goal or trying hard can definitely work, so too can encouraging them contribute to household life. Most lucrative chores are mowing the lawn, cleaning windows and cleaning the car, according to Rooster Money. And, for older children the highest earning ‘side hustles’ are paper rounds, selling their stuff and babysitting.

Cash or card?

Many parents have switched from coins and notes to cards and apps, such as Rooster, Revolut, GoHenry and HyperJar. It’s important to compare the fees, commitments (and parental oversight) of the many options, but get the right one, and you can streamline your child’s finances and give useful them insights into saving, spending and financial management.

On the downside, many people feel this generation are losing contact with ‘real’ money. So, for some parents, it’s about finding a sensible balance. Lest we forget, that crisp tenner handed over by a generous elderly relative who doesn’t do apps feels far weightier than a sum paid in remotely. And no online balance is as alive with possibilities as the rattle of a full-to-bursting piggybank. As the old saying goes, cash is king.

Further reading: Party time and how to cope