London, UK, 11th February 2016 - Sarah Willingham, consumer champion, mum of four and BBC Dragon has today called for British parents to rethink how they give pocket money to their children, having learnt that 85% of British children do not always have to earn money (by example doing chores) that they receive from their parents.
Research by Experian has revealed that most (58%) parents are trying to take an active role teaching their children how to manage money well. Encouragingly over half (51%) of parents who give pocket money do so to help their children learn how to manage money independently. However, their good intentions are being undermined by a number of factors.
Many (37%) British parents remain concerned about their child’s ability to manage their money when they become financially independent.
Commenting on the research Sarah Willingham said: “It’s clear that despite our best intentions as parents, long term we’re not doing our kids any favours by just giving them pocket money, rather than giving them the chance to earn it. Pocket money is often the first experience children have of managing money, and I’d like us, as parents, to take a more active role in teaching our kids the importance of earning their pocket money and saving for the things they’d like.
“Good financial sense is an essential life skill in the same way as learning to swim or ride a bike. If kids take an active role in family life and are encouraged to take part in activities to earn their pocket money rewards, they’ll not only build up their financial savvy but also their self-confidence and a brilliant feeling of achievement. There are all sorts of ways kids can earn their pocket money, from washing the car to walking dogs – whatever works for you as a family. But the point is that pocket money should be earned not expected.”
The Experian study exploring children’s attitudes, behaviours and influences relating to money has also revealed some concerning pocket money habits which could be setting unrealistic expectations amongst younger generations.
One in ten (10%) of those who give their child pocket money say they give it as and when the child asks for it. These children somewhat unsurprisingly receive the largest allowance over the month - £54.31 v £34.97*1 (those who receive it weekly) or £39.66 (those who receive it monthly.)
47% of parents decide how much to give their children simply based on how much they can afford as a family; a further 29% based the amount on the child’s age and 26% decide based on their child’s financial need.
Overall, across all the age groups surveyed, parents say their children have a greater appreciation of the value of money that they have earned. Interestingly, however, 15-18 year olds that still receive pocket money are the least likely of any age-group to always have to earn that money– and almost a quarter (23% ) never have to earn their pocket money, by example doing chores.
In fact, a fifth (20%) of parents of 15-18 year olds, those closest to the brink of financial independence, say they are not confident their child has a good appreciation of the value of money.
Sarah continues: “It’s absolutely crucial that we equip our kids with the tools they need to understand and manage their money later in life, and that we start early whilst their feelings and expectations around money are being set. It’s clear that kids’ attitudes towards money are shaped at a much younger age than we think, so we need to start the process of talking about money at home as early as possible.”
When looking at the greatest influences that could affect a child’s attitude and behaviours with money, 68% of parents ranked themselves as having the greatest influence. This was followed by the child’s peers (44%) and television (25%).
Teachers didn’t even feature in the top 5 and in fact ware ranked lower than celebrities at 10% V’s 14%.
In spite of this, the vast majority (61%) felt that their child could receive more support about how to manage money well in the classroom; including a quarter who believe they could receive a lot more support.
Currently, only 22% of all those surveyed had any knowledge of their child being taught any form of financial education in school.
Clive Lawson, Managing Director at Experian, commented:
“My children’s financial future and happiness is never far from my mind but finding the time and self-discipline to help them really learn how to manage money is difficult. For most children money skills have to be learnt and the younger the better. There are many rites of passage that a young adult should experience as they become independent but struggling to manage unaffordable debt does not need to be one of them.”
Recognising the importance of helping children learn essential money management skills early in life, Experian and Sarah Willingham have partnered to develop Jangle, a free app which has been quality marked by pfeg (part of Young Enterprise). Jangle is for children aged 7 -11 and is a fun and easy way to help teach children essential skills about how to manage money well while helping them save for the things they want. Jangle is non commercial.
Lawson continued; “I learnt recently that behaviours and attitudes towards money can be set from as early as seven*2, which really surprised me. It’s also one of the reasons I’m so happy to have had the opportunity to work with Sarah to develop Jangle, a great new and free app that teaches children money skills while helping them save.”
Find out more about Jangle here
Notes to editors:
*1 Estimate based on weekly figures
*2 Habit Formation and Learning in Young Children, by Dr David Whitebread & Dr Sue Bingham (University of Cambridge) : Report commissioned by The Money Advice Service May 2013
Methodology: Research was carried byComRes who interviewed 1,533 British parents of children aged between 5 - 18 online between the 19th and 23rd of January 2016.
Quotas were set to ensure an even sample of 500 parents of children aged between 5-9, 10-14 and 15-18. The data has been weighted by age, gender and region to be representative by all parents in Great Britain.
Sarah Willingham available for media interviews upon request
For more information please contact:
Priya Sahib, PR Manager
T: +44 (0) 20304 24573
M: +44(0)78 1649 1152
What is Jangle?
Jangle is a free app designed to help support parents teach their children good money management skills from a young age (7-11years old). The app has been developed by Experian in partnership with Sarah Willingham, one of the UK’s leading businesswomen, consumer champion and star of BBC’s ‘Dragon Den, and pfeg (Part of Young Enterprise), the UK’s leading financial and enterprise education charity.
How does Jangle work?
Jangle allows kids to create savings pots for things they really want. And so, when children would normally start pestering their parents for something they want, the app instead enables the parent to encourage the child to set up a pot in Jangle. Once a goal or ‘want’ is set, the child and parent will agree a number of tasks such as De-clutter Bug, Super Shopper Challenge or the Pizza Chef Challenge, against which the parent will pledge an appropriate amount which will go into the child’s virtual money box upon completion of the activity. The child also has the choice to create their own activity to further contribute to their savings.
Quality marked by pfeg (Part of Young Enterprise), the suggested activities are designed to teach children a range of money management capabilities such as saving, budgeting, the value of money and being a savvy consumer.
About Sarah Willingham
Sarah is one of the UK’s leading businesswomen, consumer champion and BBC ‘Dragon. She is as passionate about her home life and being a smart consumer as she is about her businesses and providing the best customer service.
She applies her innate business savvy at home and is regularly asked to share her consumer expertise on national TV and in the press, becoming one of the best--‐known female consumer champion in the UK. Sarah lives in Oxfordshire with her husband Michael and their four young children: Minnie (9), Monti (8), Nelly (6) and Marly (4).
Experian is the world’s leading information services company and we operate the UK’s largest credit reference agency. We help people understand, manage and improve their credit report and protect their personal and financial information online. We also help companies manage credit risk, prevent fraud, target marketing offers and automate decision making. In 2015, we were named by Forbes magazine as one of the ‘World’s Most Innovative Companies’.
Experian has run a financial education programme in the UK since the mid-1990s and develops a variety of resources to help people of all ages get to grips with issues around money, credit and credit checking. Since 2013, Experian has partnered with the charity ‘pfeg’ (part of Young Enterprise) to transform primary schools around the country into national Centres of Excellence for financial education, helping more than 12,000 pupils, parents and teachers improve their money skills. Existing teaching resources include a free interactive resource for primary school pupils and www.valuesmoneyandme.co.uk. A wide range of guides and educational videos are also available for adults at www.experian.co.uk/improve.