Children sorely need lessons in personal finance if Halifax’s latest survey of eight- to 15-year-olds is anything to go by.
Most boys and girls haven’t a clue about the cost of living and think a loaf of bread costs £15 and a pint of milk £17.
They also believe the average price of a house is almost half a million pounds (£485,000) – more than double the actual average of £220,000.
|Everyday items||Cost – according to children||Actual cost|
|Loaf of bread||£15||£1.06|
|Pint of milk||£17||44p|
|Weekly food shop||£240||£58|
Children are overestimating average salaries too. They would like to earn £4 million a year when they grow up, but expect they’ll only earn, on average, £1.5 million a year – still 50 times the current average salary.
Interestingly, the research revealed a gap in gender pay expectations, with boys saying they expect to earn £2 million whereas girls expected to earn a more modest £1.1 million.
Those who would like to follow in the footsteps of their teachers imagine that they would earn £110,000 a year when, in fact, a starting salary is nearer £23,000. Kids expect their GPs to be on even more – at £271,000 a year – when, again, salaries start from a more meagre £27,000.
And while they have more of an idea of how much a Premier League footballer earns, they still are far off the mark, expecting them to earn £4 million a year rather than the £2.6 million average salary.
Finally, they clearly think that the Prime Minister should be financially rewarded, expecting Theresa May to be earning £3 million a year when the Prime Minister’s salary is £150,000 a year.
Ready to retire at 56
Children will be in for a shock when it comes to how many years they will need to work. On average, they say they want to retire at 56, but they will have to work a further 12 years and the state pension age is likely to go up further.
Surprisingly, parents who also took part in the survey of 1,700-plus UK residents, believe that they’ve given their children a good grounding in money matters. Four-fifths of parents polled believe their children understand the value of money, while 84% were confident teaching their children about money.
Commenting on the research, Emma Bradley, parenting expert and blogger, says: “It’s really important children understand the value of money and the sooner, the better. My 18-year-old is heading to university soon, and I hope we’ve given her the skills needed to budget and not live off baked beans!”
Five tips from Halifax to get your kids talking about money
- Encourage saving from a young age: use a piggy bank or savings jar to make savings fun.
- Give them pocket money: teach them to manage their money by giving them a regular income from pocket money in return for doing chores.
- Open a regular savings account: this will help children understand about saving, interest and how to manage an account.
- Talk to your children about bills and explain all the different things that cost money and how you use your earnings to pay for them.
- Take them to the supermarket and help them build an appreciation of the cost of everyday items.