Kids think a loaf of bread costs £15, as they overestimate cost of living and their future salaries

Stephanie Hawthorne
25 May 2018
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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 itemsCost – according to childrenActual cost
Loaf of bread£15£1.06
Pint of milk£1744p
Weekly food shop£240£58
School uniform£180£213
Holidays£6,400£3,100
Car£67,000£18,000
House£485,000£220,000

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. 

 

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