Just a few of the questions you’ll be asking yourself, not just once, but throughout your child’s journey into adulthood and one of the literally thousands of practical quandaries involved in being a parent. There are no right or wrong answers and, if your in financial difficulties, cutting back or stopping pocket money altogether might be the hardest cut back to make. Safe to say it’s a hot topic of debate at the school gate.

Giving pocket money

The main reason for giving pocket money is to help children learn to manage money while they are young and you can still guide them. It is a valuable way to teach responsibility. This can help your kids to make choices. They learn that sometimes people have to wait and save up to get what they really want.

At what age?

One recent study carried out by Opinium for Hargreaves Lansdown suggests that the amount  a child receives tends to rise with age, so that children aged between four and six-years-old get an average of £5.80 per week. Ultimately the age to start giving pocket money depends on your child and you. Consider how well your child understands the purpose of money and that when it is spent, it is gone. Their understanding of the value of money and things like planning and saving will develop over time.

You could check what their friends’ parents are doing but in the end it is important to do what works for you and your family. The worse thing to do is to feel pressured in to doing something that’s wrong for your family.

Should it be earned?

Many parents believe that a certain amount of pocket money should be given to the child just because they are a member of the family and not as payment for jobs.

At the same time, children are expected to do some chores as part of their contribution to the family.

You may decide to give a certain amount of pocket money and let your child earn more by doing special chores, such as washing the car. This is preparation for the world of work. 

How much pocket money?

How much pocket money to give will depend on:

• what you can afford

• what the pocket money is expected to cover

• the ‘going rate’ among other families similar to yours

The Halifax Building Society undertook a research survey in 2019 and found that:

• the overall average amount of pocket money kids receive has also dropped for the first time in four years. The average weekly amount is now £7.01p, a 3p drop from last year’s average. A decade ago the average weekly amount was a princely £8.01.

• the use of mobile phones and other digital technology is a fact of everyday life for most of us which means kids are exposed to virtual money almost from birth.  So it’s surprising to find that 84% of parents opting to give pocket money in cash.  

• regionally, pocket money rates are highest in the capital, with children in Greater London receiving an average of £8.18. Kids in the Highlands get the highest rate outside London, with an average of £8.11 a week, while those in the South East of England receive the lowest average amount, at just £6.19.

• pocket money can be used as a weapon with just half (51%) of parents saying they would stop giving pocket money as a way to punish bad behaviour.  This is on a par with grounding as one of the most commonly used ways parents try to keep behaviour in check.

What should pocket money cover?

Work out with your child what the pocket money will cover and what it will not. Talk it through and make sure they understand.

In the primary school years you may decide that pocket money could cover some saving, some school lunches and some for your child to decide what they want to use it for. Be careful not to criticise their choices if you are not happy with them. Giving choice and then telling your child what to do does not develop their sense of responsibility or independence. Be prepared for them to buy something you really don't approve of - if they are set on this, have a conversation and negotiate. 

If you are giving pocket money it is important to be consistent and reliable about ‘pay days’. Again, this structure is ideal preparation for the world of work, and much else in adult life. 

Pocket money and punishment

Stopping pocket money often seems an easy answer if your child has done something wrong. Sometimes this is OK. For example, if they have broken something it may be important to give part of their pocket money each week to pay for it, if this seems fair. However, taking away all of your child’s pocket money, especially over a period of time, can cause resentment towards you and difficulty with friends.

Pocket money and teenagers

Once your children reach their teen years there’s little doubt the whole pocket money issue will need to be renegotiated. Instead, use this as a further opportunity to teach them about the value of things and the importance of saving.

You might like to agree to pay for the necessities while giving pocket money for the fun extras, so decide with your child what you will and won’t pay for. Basic necessities might include: transport to and from school, school uniforms and supplies. Extras could be things like going to the cinema or other trips with friends, fast food and other snacks you’re unwilling to pay for. For bigger purchases, perhaps you can agree to pay for half of it while they save for the rest themselves.