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.”