Pocket money for kids: How much should you give and why

Almost every parent reaches this question at some point when raising their child. Should you give them pocket money, and if so, how much? There's no right answer, but understanding the benefits and considerations of giving pocket money to your kids can make it easier to come to a decision that suits your family. 

This guide explores whether to give pocket money, how much families might give at different ages and how it could help children develop financial confidence and positive saving habits.

Should children get pocket money?

Giving children pocket money is a personal choice that depends on your family’s circumstances. Some families link it to chores, others keep it separate, and some choose not to give it at all. What matters is finding an approach that works for you.

Whatever you decide, pocket money should fit comfortably within your household budget. There’s no minimum amount you need to give, and it can be worth making sure you have an emergency fund or other savings set aside first.

Why should children get pocket money?

Pocket money gives children a safe, low-stakes way to practise handling money before the decisions carry any real weight. It can help with:

• Understanding the value of money: Learning that once it's spent, it's gone, rather than an unlimited resource.
• Building saving and budgeting habits: Practising putting money aside for something bigger rather than spending it all at once.
• Encouraging independence: Making their own choices about what to spend on and living with the outcome. 
• Preparing for later life: Children who've managed their own money can find it easier to manage a wage or allowance once they're older.
• Learning from small mistakes: A bad spending choice with a few pounds of pocket money is a much gentler lesson than the same mistake made later with a full pay cheque.

How much pocket money should kids get?

How much pocket money a child gets varies between families and their own circumstances. One UK-wide survey found the overall average to be £5 a week, with the amount rising with age. 

The table below gives a general sense of how amounts and responsibilities tend to shift as children get older.

These figures are a general guide rather than a target; some families give more, some give less, and what your household can afford will always come first. Being consistent can be more important than how much you give, as it helps children know what to expect and when. If things need to change, explain why to help maintain your child's trust.

When should pocket money start?

There's no universal answer here; what works for one family may not be the right choice for another. It’s important to look at your financial situation first and your child's understanding of money, rather than their age alone.

What age to start

It’ll vary for each family, but many families begin once their child has some grasp that money is exchanged for things. If your child can understand that spending £1 on sweets means they can't also spend that same £1 on something else, they're usually ready to start.

What age to stop

There's no fixed age to stop either. Some parents choose to phase out pocket money as their teenagers start to earn their own income, but when this happens will vary for each child. 

It's common for the amount to increase as the frequency drops, for example, moving from a small weekly amount to a larger weekly or monthly allowance to cover expenses such as bus fare and other larger purchases.

How should pocket money be given?

Pocket money doesn't have to mean coins in a jar, though that can be a good option for younger children who benefit from physically handling money. 

Some families start with cash and introduce a card or app as their child gets older and takes on more responsibility.

• Cash tends to help younger children understand money in a hands-on, physical way.
• Cards and apps can give parents visibility over spending and make it easier to set limits.
• Many families start with cash and move towards a card or app around ages 10–12, as children take on more responsibility. (Cards and apps may include fees. Parents may wish to review the controls, protections, and terms before making a decision.)
• Some families may set up a savings account to deposit some pocket money into to help their child learn about saving up for larger purchases.

There isn't a single correct approach here; it comes down to what suits your child's age, your family's preferences, and the different apps and savings accounts available.

Turning pocket money into a saving habit

When a child wants something that costs more than their pocket money, it’s a great opportunity to teach them about saving. Encouraging children to put money aside for bigger purchases can help develop habits that support them in managing money later in life.

Alongside weekly pocket money, some families may also choose to make small, regular contributions towards a child's longer-term savings.

A Junior ISA* is one of the ways UK families can do this. If you're unfamiliar with them, it's worth understanding what a Junior ISA is and what they offer for families saving for a child. 

Some children may have an existing Child Trust Fund in their name if they were born between 1 September 2002 and 2 January 2011. If this is the case, some families may choose to save into this account rather than open a different account for their child. 

A child cannot hold a Child Trust Fund and a Junior ISA at the same time. If your child has a Child Trust Fund, you can continue contributing to it or transfer the account to a Junior ISA. Our guide on Child Trust Funds vs Junior ISAs explains the differences between the two options to help you make a decision on which may suit your family best.

Saving for your child isn't about replacing pocket money or turning it into something more complicated than it needs to be. It's a separate, longer-term option that some families choose to run alongside it to provide a lump sum for when they turn 18.

Got a question about what savings options Unity Mutual offers? Speak to our friendly team on 0161 214 4650. We can't give advice, but we can provide factual information on our products to help you make an informed decision for you and your family.

If you're unsure whether a product is right for you, it's worth speaking to an Independent Financial Adviser (IFA). You can find a local adviser at unbiased.co.uk. Financial advice may come with a fee, so be sure to ask about costs before receiving advice.

*Terms and conditions apply. Capital at risk with investing.