Weekly Spending Money for UK Youth Down Sharply

In a report that may amuse many except the youngest Britons, a survey shown as part of research conducted by the Halifax unit of Lloyds Banking Group has found that parents are cutting back in a crucial area of the family budget. According to the statistics, British children’s pocket money has hit the lowest levels since 2003 and researchers say this signifies a big shift in family spending. The effects of the global recession have now reached the youngest in the United Kingdom, say the researchers, as parents try to reduce all spending that is not essential in an effort to pay down massive debts with wages that are not keeping up with the cost of living. The added threat of an unstable job market make this an especially tough time for UK families.

In 2009, the average amount children were given per week was at £6.24 but by the same time in 2010, that amount had shrunk to £5.89 which is just a touch above the low that British families doled out to their children in 2003, £5.79 weekly. While wages have risen over the past year, the cost of goods and services plus the VAT and other expenses have led to a higher cost of living. The report covered children between the ages of 8 and 15, including just over 1,200 children altogether who were surveyed during the latter part of August 2010.

While to some this may appear to be a small issue in light of the overall UK economy, psychologists say that it is important to realize that children form crucial concepts about financial matters at an early age. What may seem to be a minuscule issue to adults is often quite overwhelming to a child between 8 and 15 years of age since this is when principles of spending and saving. Children who grow up with what they perceive to be lower funds often struggle as adults due to a perception that they have experienced a childhood where they were unable to enjoy material things due to lack of money in the home.