UK children receive an increase in earnings above inflation

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Children have received a higher-than-inflationary boost in “earnings” from parents and guardians, even as household incomes have been under pressure from rising costs.

NatWest Rooster Money, a savings app aimed at children, has revealed that users saw their median annual income rise by 10.7% to over £330 between March 2022 and February this year, higher than the 10.4 % inflation over the same period.

Fewer children received regular pocket money each week, according to findings based on data from more than 125,000 young people between the ages of six and 17. That was down 13.5% over the period, as parents switched to one-time payments to celebrate special occasions.

“When faced with less regular pocket money, the kids have been really resourceful and proactive,” said Will Carmichael, chief executive officer of Rooster Money. He said the children had sought income from evening and weekend jobs as well as housework.

Children’s spending and savings habits contrast with a decline in inflation-adjusted earnings growth for parents and caretakers, as higher prices reshape the way households manage finances.

Pocket money for young people grew 11% last year compared with nominal wage growth closer to 6% for workers. This meant their financial independence was not burdened by inflation; survey data found that they spent mostly in supermarkets, fast food restaurants and video games.

On average children saved around 8% of their money over the year, comparable to the adult household saving rate of 8.3% in 2022, according to the Office for National Statistics.

NatWest Rooster, which charges users a monthly fee, and competitors like GoHenry, Nimbl and Starling, give parents control over their children’s spending using a prepaid card as opposed to a generic checking account. Debit cards linked to a child’s bank account are available from age 11 onwards.

Babysitting, reselling clothes, and tutoring helped the children increase their income. These side businesses accounted for around £50 of earnings outside of household chores, 16% more than in 2021-22.