Parents cut back on children’s pocket money as UK inflation bites
Children are feeling the impact of the cost of living in the UK with nearly a third of parents cutting spending on pocket money.
Halifax’s annual pocket money survey reveals that the average weekly pocket money has fallen by 23 percent, from £6.48 last year to £4.99 now.
According to the survey, the cost of energy is the number one concern for UK parents, with 71 percent of those surveyed citing it as their number one concern.
Energy bills are expected to rise 70 percent in October, with a further increase expected in January 2023. Last week, the Bank of England warned that inflation in the UK could reach 13 percent by the fall.
Despite a deteriorating economic climate, half of British parents said they were willing to sacrifice their own spending to maintain their children’s weekly money. Leisure expenses like dining out and “treats” like designer items were some of the things parents said they were willing to cut back.
Since Halifax started keeping pocket money in 1987, interest rates and inflation have had a marked impact on the amounts parents give out.
“In general, periods of low inflation and thus lower interest rates correspond to higher or growing levels of pocket money,” Halifax said.
A period of economic stability in the late 1990s and early 2000s led to a large rise in the average pocket money, when it peaked in 2007 at over £8 a week. It fell back after the financial crisis, when interest rates fell sharply but inflation rose.
There was another decline during the pandemic as millions of parents faced an uncertain economic future.
“More recently, a sharp rise in inflation has corresponded to a sharp drop in spending money,” Halifax added.
The most popular purchases with pocket money continue to be gaming and candy, according to parental votes. Toys follow closely, as well as clothes, then hobbies such as books.