A new report from the most authoritative regular survey of children’s finances has found that one out of every three children in the UK between the ages of eight and 15 are concerned about money “at least sometimes.”
The report, commissioned each year by Halifax, found children in London to be the most anxious concerning their finances, with 54% reporting having money concerns some of the time and an additional 12% saying they were worried about money all of the time.
Meanwhile, children under the age of 15 living in Wales were found to be the least concerned about their financial situation, although 24% said they did worry at least some of the time.
In addition, boys were found to have a higher stress level over money than girls. While boys earned 12% more pocket money than girls — £6.93 to a girl’s £6.16 — 37% of boys were found to be concerned over money in comparison to 30% of girls. Last year’s survey reported just a 2% difference in allowance between boys and girls, with no gender divide being found, writes Amelia Murray for The Telegraph.
Giles Martin, head of savings at Halifax, said that children who worried about money may be picking up on their parents’ financial stress levels. While parents in Wales and the west of England were found to be the least concerned over money, 86% still reported having some anxiety. Meanwhile, 95% of parents in the north west reported being troubled by their financial situation.
Parents were also found to have knowledge of their children’s financial worries, as 33% of those surveyed said they believe their children worry about money. Parents in London were more likely to believe this, with 52% of parents there reporting such beliefs.
However, the report also discovered parents being more confident in their ability to teach children about money than in previous years, with 83% saying they felt comfortable talking about money with their children in comparison to 76% in 2015.
Dimitrios Tsivrikos, a consumer and business psychologist at University College London, said that many children are beginning to learn about money earlier, and from a variety of sources including online purchases and in-app downloads. Although they may be using their parents’ money, they are the ones making the financial decisions.
Tsivrikos went on to say that the ability to easily make purchases for children, including everyday needs and subscriptions, could be a contributing factor to their financial anxiety.
“It’s no longer the case that the early transactions of children are occasional trips to the sweet shop. Now, kids are getting used to buying services online which they use everyday. If parents can no longer fund these purchases, children end up agonising about what they see as a ‘loss of a resource’,” said Tsivrikos.
While making such transactions could be seen as a valuable way to learn about money, Tsivrikos suggests that the stress and anxiety that comes with making such financial decisions could be harmful to children who do not have a complete understanding of the way money works.
According to the study, children would like to learn more about household finances, with 63% saying they would like to know more about bank accounts and 26% looking for more information about credit cards.
“Young people today bear more financial risk in adulthood due to increased life expectancy, increased sophistication in financial services marketing, and uncertain economic and job prospects. A third of young adults find themselves in debt, so unfortunately it is not surprising that one in three 8 to 15 year olds are already harbouring concerns about their financial situation,” said Michael Mercieca, chief executive of financial education charity Young Enterprise.
Mercieca added that an allowance is a good way to teach young children earning money, budgeting, and saving for what they really want.