Passing on wealth...every week!
01 June 2024With half term now over for many school-age children, I think it would be great to look at the way pocket money habits have changed over the last year, with a recent survey (released in August 2023) out from the Halifax. It is interesting to note some of the variances this survey shows.
UK pocket money survey from the Halifax
The Halifax produces a pocket money survey in the spring/summer of most years. The 2023 Halifax survey was undertaken in May 2023 and makes interesting reading.
The survey notes that, despite the cost-of-living crisis, over half of parents have not changed the amount of pocket money they regularly give to their children. However, pocket money has remained flat from 2022, at an average of £5 per week, and this is almost a fifth (19%) lower than a decade ago.
The study looks at the effects of external factors such as the base interest rate and inflation rate on the amount of money given to children. It notes that, in general, pocket money falls when people have less disposable income. With interest rates returning to levels not seen since before the 2008 financial crisis, and with inflation still high until very recently, there has been no rise in the average amount of pocket money provided by parents or other family members.
Most children get their pocket money from their parents, although over a third get money from their grandparents. Gifting to younger generations can be an effective way of reducing an IHT bill, and there are a number of tax efficient ways of making gifts, although these should always be discussed and planned carefully with a suitable adviser.
Giving pocket money is also a great way to teach children about budgeting, saving and responsible spending.
More on the pocket money survey can be found on the Lloyds website here (Halifax is part of the Lloyds group): Lloyds Bank Pocket money survey
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Passing on wealth to future generations is of course an important topic and if you would like to consider further the ways that this can be achieved through financial planning then please contact the team at Chapters Financial. No individual advice is provided during the course of this blog.
Keith Churchouse FPFS
Director
CFP Chartered FCSI
Chartered Financial Planner
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