Parents spend £43m a week on pocket money

Almost three quarters of parents in the UK (73 per cent) are giving their children pocket money, contributing over £43 million to piggy banks every week, according to a new report by Aviva.

The Aviva Family Finances Report revealed the average amount of cash children receive is £5.75 per week, which equates to £23 a month. This varies depending on the child's age and where they live and payments do rise with age, putting a strain on household finances.

More than a third of participants (38 per cent) said they chose the bank or building society their child invests with and selected the type of savings account they opened.

However, parents rarely have control over their child's money after that, with 45 per cent of parents admitting to allowing their child to spend their pocket money on whatever they choose each week. A third try to encourage some sort of savings habit from a young age, with 21 per cent inspiring them to save something for a rainy day, while a further nine per cent try to get them to save some pocket money for their long term futures.

Tim Orton, Aviva's product director for pensions and investments, said: "With financial education due to be introduced to the school curriculum in 2014, it is good to see that some parents are already encouraging their children to grasp a basic understanding of what it takes to make and save money on a regular basis."

Once they become teenagers, one in five (23 per cent) are working part-time every week to subsidise their pocket money, with the majority of parents (70 per cent) persuading them to take on a job for the money, while 55 per cent want them to get employment for personal benefits such as building confidence.

However, a much larger percentage of children (60 per cent) do not have the desire or need to work, as parents continue to support them, giving them money "as long as they need it" (three per cent) or until they leave home (nine per cent).

As money becomes tight in the UK, some parents are encouraging financial independence by cutting the apron strings. A quarter of respondents (24 per cent) stop pocket money when their child reaches 16, while one in five (19 per cent) wait until they are 18 years old. Some 28 per cent stop paying when the child gets a part-time job.

By James Francis