Debt and inflation ‘now a problem for children’

It is not just adults who are suffering from debt and inflation problems, according to a new survey, with children's pocket money now being affected.

A Santander study has found half of children aged between ten and 16 have had the way they receive pocket money altered in the past three years, with this either being stopped altogether, reduced or only payable as a reward for work.

Such developments may be a reflection of the debt management problems their parents face, which could have reduced their ability to give money freely to their youngsters to spend.

And a specific problem faced by children has been what the bank calls "kidflation", where the goods they typically spend their money on have soared in price by 68 per cent more than the Retail Price Index (RPI) rate in the last three years.

Inflation-busting price rises have affected goods like sweets, soft drinks, children's clothing, entertainment and recreation, plus the cost of using mobile phones.

Santander's director of banking Nici Audhlam-Gardner observed: "Children are seeing the costs of their everyday purchases rising at a very worrying rate and parents are also being impacted with the costs of children's items apparently increasing more than the standard adult measure of inflation."

The increasing cost of children's clothing may be a particular concern, not least at times of the year such as this, when many parents will have to buy new uniforms as their kids prepare to change school in September.

Official RPI inflation was five per cent in June, while the Consumer Prices Index measurement of inflation was 4.2 per cent.

By Joe White