UK kids are becoming financially smarter and more entrepreneurial, as they learn to rely less on pocket money from parents who, in turn, have been hit by the continuing rise in the cost of living.
More children are turning to traditional income-generating schemes, such as babysitting and doing extra chores for grown ups, while others have come with sparkling alternatives, such as glitter tattoo-making.
According to a survey of more than 300,000 children by the NatWest Rooster Pocket Money Index 2023/2024, earning, spending and saving behaviour among children is changing faster than ever.
Children who took up more chores and side hustles earned about £9.23 per week, or £480 annually, which was more or less the same as the last year, the report said.
And children had an average savings rate of 9.5%, nearly as much as their parents, who save about 10.2% annually. It helps, of course, that the children won't have the same bills to pay that their parents do.
Parents tightening up over pocket money amounts
While 30% of parents still choose to pay regular pocket money, they are paying less, down from an average of £3.88 per week last year, to £3.78 per week this year.
NatWest Rooster Money founder and CEO Will Carmichael said: "Today's generation of young people is a force to be reckoned with. Come economic rain or shine, they'll always roll with the punches and find new, sophisticated and resourceful ways to fill up their piggy banks - if they still exist in years to come! I think we can all agree that this is an excellent sign that some enormously bright, financially-confident futures lie ahead."
Konnie Huq, British broadcast presenter and children's author said: "I love that this data shows UK kids have such get-up-and-go when it comes to money. It's so important that we give our children ample opportunities to understand its value; that it's not something to take for granted.
"Thinking back on my own childhood, I didn't have a regular allowance and I'm probably in a much better position for it, having had to make my own way with a Saturday job and get to grips with trade-offs and being responsible from an early age. If that kind of independence is becoming more common, that can only be a good thing."
How are kids earning their money?
For children picking up extra chores for payment, mowing the lawn was the most lucrative this year, paying an average of £3.47 every time, whereas cleaning the car came a close second at £3.25. Cleaning the windows paid £1.63, whereas gardening was less lucrative at £1.36.
Kids also earned handsomely through special occasions and one-offs this year, such as Christmas, yielding £47.66 on average, with birthdays bringing in around £50. Treats from relatives also paid reasonably, at around £25.
Rewards for good behaviour surged 12% this year, with kids gaining an average of £9, while doing homework earned around £7. Parents also encouraged reading with a financial incentive, while the tooth fairy took the edge off a missing tooth by leaving £4 in return.
What are kids spending their money on?
Kids this year had some big goals to save for such as video games, holidays, their own futures, clothes, phones, shoes, LEGO and more.
Food and gaming were the top choices for spending this year, with the report highlighting: "In 2023/24 kids appeared to be overwhelmingly motivated by food in their spending, with the greatest number of transactions taking place at shops and venues where they can grab a bite and hang out.
"They’re also digital-savvy - with online spending and gaming featuring prominently - and the popularity of public transport is a nod to their increasing independence."
However, brick and mortar retailers need not worry too much just yet - children are still spending most of their money in high-street shops, rather than online.
Children spent the most at Amazon, Tesco and McDonald's, with Primark, the Co-op, Playstation and Xbox following close behind. Sainsbury's, Asda and Shein were also significantly popular.
Despite their big spendings, the report also highlights that children these days recognised the importance of charitable donations, with the average donation per child to charities dealing with children and young people being around £4.
