One-fifth of parents borrow money from their children's savings to pay living expenses, finds poll

'Parents do need to ensure that they are able to give their kids this pocket money, without needing to dip into it to cover wider household bills'

Raising a baby to the age of 21 costs an estimated £230,000 in Britain (Shutterstock)

Parents are dipping into their children’s savings to supplement day-to-day living costs, a study has found.

Researchers polled 5,000 mums and dads and found one-fifth have borrowed money from their offspring’s piggy banks and accounts in order to pay their living expenses.

Nearly half of those had taken money out of their children’s savings to pay household bills, with 19 per cent borrowing money to cover the cost of groceries, while more than one-sixth have done so in order to cover childcare.

“The wider squeeze on the household budget seems to have had little impact on the generous amounts parents wants to give their children,” said Jody Coughlan at comparethemarket.com which commissioned the research.

“That said, parents do need to ensure that they are able to give their kids this pocket money, without needing to dip into it to cover wider household bills.”

The report uncovers the spending habits of British children who receive an average of £23 a month, totalling £276 every year and giving them the equivalent of £3.9bn to spend collectively.

The research also found children’s savings accounts are relatively healthy, with the average child having a significant £982.50. One-fifth of children have £2,000 sitting in their savings.

It also emerged children are generating a second source of income, with four in five parents giving their offspring extra money to cover unforeseen requests such as new clothing or nights out with friends.

These ad hoc requests see one-fifth of parents topping up pocket money once a fortnight and more than a quarter giving these extra handouts once a month.

Grandparents appear to be another fruitful source of income for children.

One quarter of grandparents find themselves contributing to their income, with two-thirds giving their grandchildren generous handouts as and when they see them.

Unsurprisingly, children in the capital are the recipients of the highest amount of pocket money compared to anywhere else in the UK, with the average parent in London giving £29 to their child each month.

In contrast, children in the East of England are given £19 a month, while those in the South-west are given £20.

Fortunately, the poll also shows parents are confident in their children’s ability to manage their finances effectively, with almost three quarters believing the youngsters will be well equipped to handle money as they approach adulthood.

In the absence of financial education at schools, this could be down to discussions at home, with nine in 10 stating they have talked about money management with their children.

However, many clearly feel their children would benefit from additional teaching in schools, with four-fifths of those polled believing schools should do more to teach financial education.

Cmparethemarket.com Jody Coughlan added: “It’s incredibly encouraging to see the number of parents who are willing to talk to their children about financial management from such an early age.

“Not only will this do more to prepare them for financial responsibility in the long run, but it should also help to lessen their long-term dependence on the bank of mum and dad as a result.”

SWNS