Parents are raiding their children’s piggy banks to cover the cost of groceries and household bills, according to new research.
Comparethemarket.com reveals that almost a fifth (19%) of parents have borrowed cash from their child’s bank account.
The rising cost of living is blamed for parent’s borrowing behaviour, with 49% of those who admitted borrowing money saying that they had used the money to cover household bills. Some 19% of those who had borrowed cash from their kids said they had done it to buy groceries, while 17% used it to pay for childcare.
Figures show that kids are wealthier than ever before, with almost a quarter of grandparents giving their grandchildren pocket money, which is, on average, £96 a year.
Children receive an average of £23 a month in pocket money from their parents, adding up to a hefty £276 a year – that compares to the £13 a month their parents say they used to get as a child. On top of that, the average child has £982.50 stashed in a savings account too and a fifth of kids have savings worth £2,000.
Kids in the capital get the most pocket money, receiving an average of £29 a month, compared to those in the East of England who typically get £19 a month. But children are at least earning their spending money – many only receive pocket money if they carry out chores or complete certain tasks. Some 77% must tidy their room, while 37% help clean the house and 28% empty the bins.
While children aged 12 and under are most likely to spend their money on toys, those aged 15 and over splash out on clothes while 13- and 14-year-olds like to spend their cash on sweets.
Three-quarters of the 5,000 parents polled say giving their children pocket money means they would be well-equipped to handle money when they are older. Nine out of 10 parents said they have talked to their children about managing their money.
Jody Coughlan, Compare the Market’s money manager, says: “It’s incredibly encouraging to see the number of parents willing to talk to their children about financial management. Not only will this do more to prepare them for financial responsibility in the long run, but it should also help to lessen their long-term dependence on the Bank of Mum and Dad.
“That said, parents do need to ensure they are able to give their kids pocket money, without needing to dip into it to cover household bills.”
Some 12% of parents who have dipped into their child’s savings have done so to make a mortgage repayment, while 14% have used the money for personal bills and 10% to spend on luxuries.