Kids cost pocket money and deposits

Updated: 
gril with coinsThe costs of kids is soaring with parents forking out £1.8m in pocket money this summer. And those wanting to help their kids get on the housing ladder need to save ever more because of low interest rates.

Research from Sheila's Wheels claims parents will give each child an average of £246 over the summer.

Some 17% admit they feel bulldozed into giving their kids the same amount of spending money as their friends.
  • 42% of parents are dreading the squeeze on their purse strings over the summer break. 52% admit that kids get too much cash these days,
  • dads will be handing out an average of £260 to their children
  • mums will shell out £232
  • 71% said their children are much better off than they were
  • 21% say their children play them off each other to wangle more spending money out of them.
  • 20% admit that their children have guilt-tripped them into handing out more money with almost a quarter of dads (24%) having fallen for this tactic compared to 17% of mums.

Dads and mums

Over a third of dads (35%) admit that they are a walkover when it comes to handing out cash, with 18% preferring to splash the cash to keep the kids occupied rather than face the consequences - compared to just one in ten mums (ten%).

Some 44% of dads admit that they go on family days out just to keep the kids happy - compared to 40% of mums who refuse a family day out in order to keep an eye on the bank balance.

Adding to the summer spend, 38% of parents will be forking out on DVDs and video games to keep their kids entertained and 15% will splash out on the latest fashions for their kids.

Mummies' boys

The findings reveal that the clichés of 'daddies' girls' and 'mummies' boys' are only myths, with dads handing out £119 less per year in spending money to their daughters than their sons. Mums are far more even-handed, only spending £8 more on sons in pocket money through the course of the year.

Some 35% of dads admit that they struggle to keep pocket money equal between their children, with a fifth (20%) finding sons to be more persuasive when they ask for pocket money.

Property woes

It gets worse for those saving to help their kids get on the property ladder. New research from Castle Trust reveals that 49% of parents who have or plan to contribute to their children's first home, plan to raise money through cash savings but those savings are not earning enough interest.

In order to keep pace with house price inflation over the past 10 years, a higher rate tax payer would have had to receive 4.3% gross AER on their cash savings and a basic rate tax payer would have needed 3.2% Gross AER.

But the average return of the top five instant access savings accounts with a minimum of £1,000 or less is just 1.6% Gross AER.

Other findings include:

  • 32% intend to raid their stock market related investments,
  • 26% will use JISAs and Child Trust Funds
  • 19% intend to cut back on certain aspects of their lifestyles in order to help their children on to the property ladder
  • The average contribution will be £16,300
  • 73% don't expect to get the money back