Pocket money takes a hit in pandemic

Teens are feeling the knock-on effects from cuts to parents’ incomes, as VICKY SHAW reports

Squeezed household budgets over the past year have triggered pocket money cuts for teenagers, according to new research.

One in five (21%) parents have had to reduce or stop payments into savings accounts for their teen, research from financial services provider OneFamily found. The decrease equates to a typical drop of £5.40 per teenager per month.

Financial pressures caused by the coronavirus crisis was a key reason, given by 47% of affected parents.

Some teens have faced a double whammy, having been furloughed from jobs as well as facing a cut in an allowance from parents.

For some, they have ended up doing more work around the family home – with more than a quarter (26%) of parents saying their teen has taken on more chores than their partner during the pandemic. Performing chores around the house can, however, help young people to learn the value of money.

One-Family heard from teacher Kay Johnson, who has been paying both her sons, aged 17 and 14, pocket money based on the number of jobs they do around the house.

“I’ve always wanted my boys to know how to do the housework – it’s an essential life skill. Plus, it’s good that they’re so financially aware, because it’s not going to be easy when they are older,” she says.

A third of parents are worried about the impact of the payment cuts on their teenagers’ savings accounts.

A further 18% have sacrificed their own savings in favour of their children’s in the past year.

Young people aged 13-19 and their parents took part in the survey.

Paul Bridgwater, head of investments at One Family, says: “It’s been a challenging time, and many parents have been hit hard financially by the pandemic.

“Where costs have had to be cut, this has inevitably meant a knock-on effect for teens.

“We have also seen some teenagers picking up more responsibilities in order to help out their family and perhaps earn some extra pocket money, as being furloughed from their jobs meant many lost their usual income from weekend and holiday work.”

Where costs have had to be cut, this has inevitably meant a knock-on effect for teens OneFamily’s Paul Bridgwater, above

Paying kids to do chores can help to teach them about the value of money