Breaking the piggy bank: UK kids ‘earning’ £600 plus a year are let down by a lack of financial education
UK children are ‘earning’ almost £13 a week - or just over £660 a year
Two thirds (68%) of children are actively tracking how much they are saving
Less than half of children (47%), say they are actually learning about money at school
UK kids between the age of eight and 15 are ‘earning’ almost £13 a week – equating to more than £660 a year, a new report from AXA Investment Managers has revealed1.
The study highlighted that British children under the age of 16 are becoming increasingly savvy about managing their money. While the majority (84%) of British adults believe that children, under the age of 16, do not understand the value of money, it appears some are actually learning the art of cash management early on. In fact more than two thirds (71%) of children use a savings account and over one in five (22%) use online or mobile banking to monitor their money2.
However, despite these encouraging findings, there remains a big gap when it comes to educating the UK’s younger generations. Financial education in schools can clearly play a vital key role when it comes to getting children understanding more about finance but the report found that less than half of kids (47%), say they are actually learning about money at school.
For those who are receiving financial education, it’s clearly having a positive impact with 60% of children proactively saving their cash. In stark contrast however, the same amount who have not had any financial education (60%), say they are not saving a penny.
Savvy money managers
Despite the knowledge gap, many British kids are taking action and keeping a close eye on their piggy bank with two thirds (68%) actively tracking how much they are saving. Encouragingly, almost two thirds (64%) see saving as an opportunity to learn how to manage their own money.
Notably, 54% ask for money as a gift rather than a surprise present for their birthday or Christmas and around two-thirds (64%) receive cash as a present, chiefly from their family. More than half (56%) receive pocket money on a regular basis – giving the typical UK kid a weekly income of £12.76 per week – or £663.52 annually.
Those children who are already engaged with their finances are revealed to be increasingly shrewd when it comes to managing their money, with almost half (45%) preferring to save rather than spend. So focused are some on building their savings pot, that over a third (37%) of industrious children earn money from a job, or doing chores, while 17% have even sold things to boost their savings.
No substitute for starting at school
Given the survey’s finding, AXA IM has renewed calls to nurture and encourage a positive savings culture in children from an early age. The asset manager has partnered with KickStart Money, an initiative developed by charity MyBnk involving 20 of Britain’s leading savings and investment firms, where the goal is to bring financial education to more than 18,000 primary school children.
Commenting on the report, Hazel Pitchers, Global Head of Marketing at AXA Investment Managers said:
“It’s really encouraging to see that today’s children in the UK are engaging with money. Many appear to have a positive attitude towards managing their cash and some are even starting to think long term about saving.
“But we want to see this gain further traction and this means getting more support from the government and educational organisations. That’s why we partnered with KickStart Money, which aims to bring financial education to thousands of primary school children.
“When it is effectively implemented, financial education within schools can have real impact but there’s always more that can be done. Financial education really needs to start at an early age. We will continue to champion this work and support the good work KickStart do.”
Stephen Timms, Member of Parliament for East Ham, who is backing calls for more financial education in schools, said:
“As this report shows, financial education in schools is patchy. We need to do more to prepare young people to manage their money. However, it is encouraging that children engaged with financial education are tracking their spending and saving and are more likely to be saving. We need much more robust financial education, starting at primary school.”
Guy Rigden, CEO at MyBnk, a charity that develops financial education programmes including KickStart Money, said:
“There’s some really good news here and compelling evidence that young people can engage positively with money. When exposed to financial education, children as young as eight tend to start saving.
“That’s why it’s crucial teachers and parents get expert-led support to develop these early behaviours into lifelong habits. The government needs to make money lessons compulsory for all pupils. Together we can build financial capability and resilience to prevent young adults being saddled with unsustainable debt and vulnerable to scams.”
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Notes to Editors
1. During June 2018 GFK interviewed more than 2,000 adults (51% female and 49% male), focusing on the top 80% of earners from across the UK. Those respondents who were parents were asked to invite their children to answer some questions. The parents had the option to ask the questions, or to let the children take part themselves. In total, GFK interviewed 120 children, aged between eight and 15 through an online survey.
2. Results from a base of below 50 are classified as indicative of a group’s responses, as the margin of error will be wider than usual.
About AXA Investment Managers
AXA Investment Managers (AXA IM) is an active, long-term, global, multi-asset investor. We work with clients today to provide the solutions they need to help build a better tomorrow for their investments, while creating a positive change for the world in which we all live. With approximately €759 billion in assets under management as at end of June 2018, AXA IM employs over 2,390 employees around the world and operates out of 30 offices across 21 countries. AXA IM is part of the AXA Group, a world leader in financial protection and wealth management.
About KickStart Money
20 of Britain’s leading savings and investment firms, brought together by the Tax Incentivised Savings Association (TISA), are supporting a ground-breaking project that aims to arm 18,000 school children with essential money skills to help create better financial futures for a generation.
Kickstart Money Partners contribute financially to the design and delivery of the programme. Their staff also has volunteer opportunities – benefitting from having their expertise and real-world insight on the frontline.
MyBnk is a charity that delivers expert-led financial education programmes to 7-25 year olds in UK schools and youth organisations. Together with young people, they have created innovative, high impact and high energy workshops that bring money to life. MyBnk covers topics such as saving, budgeting, public finance, social enterprise and start-up entrepreneurship. Alongside delivery, they also design projects and training programmes. Since 2007 they have helped over 200,000 young people learn how to manage their money.
About Stephen Timms
The Rt Hon Stephen Timms is currently the Member of Parliament for East Ham. He is also the Labour Party's Faith Envoy. He was the Shadow Minister for Employment from 2010 until September 2015 and currently sits on the Exiting the European Union Select Committee.
Stephen has attended sessions of the successful money skills programme aimed at primary school children, KickStart Money, in the Houses of Parliament. The workshops are normally held in schools across the country, however this special session took place in Parliament to mark the launch of a report into the effectiveness of the programme.
About Guy Rigden
Guy Rigden became MyBnk CEO in 2016 after joining as Expansion Director in 2013 and becoming Co-CEO in 2014. Under his leadership, MyBnk has increased the breadth and depth of its work with vulnerable and disadvantaged young people. The charity has also started working with primary-aged children and is developing financial capability programmes for the deaf and the blind.