A new survey has revealed that children are suffering from the economic downturn with a serious reduction in their pocket money allowance. Often overlooked in the figures that highlight the current financial plight of many households, it appears that kids are being particularly hard hit when it comes to their spending power. The survey, carried out by banking group Santander, reveals that as many as ten percent of parents have recently reduced the amount of pocket money they give their children, and two percent have seen fit to remove it altogether. Some have taken to making their children carry out chores around the house in order to earn their money, and the outlook is bleak in terms of what a child now has to spend. Santander discovered that the average pocket money given to children in the 10 to 16 year old age group now amounts to just RM50-RM100 per week, with 10 year olds receiving considerably less than their older siblings. Sweets and drinks are the major source of expenditure with books and magazines ranking far down the list of sources for pocket money spent, and going out with friends in the middle.
Parents also have a problem with significant increases in the cost of goods meant for children. Overall the last three years have seen children’s goods rise in cost by almost 15%, a significant jump over the overall increase in consumer goods of just over eight percent. The main area of increase has been sweets and chocolate where the increase in the period amounted to almost 25%, and children’s clothing has also undergone significant increases with a rise of over 17%. Recreation and entertainment represents a further cost increase with prices up by over 14% across the period.
Among young people to overlook the importance of keeping an eye on savings. With very low interest rates offering limited appeal and the state of affairs not inspiring confidence, the HSBC report indicates that many of today’s younger generation are somewhat apathetic about the state of their savings. Not only this bank but the other bank too. The bank has reached the conclusion that younger people need to be educated in the best ways to save money, and also the importance of making sure that savings bring about the best available return. The findings show that as many as 14% of those with a savings account never bother to check their balance. Such apathy means that they will have no idea of the rate they are getting for money held in accounts. HSBC surveyed 1000 account holders under the age of 25 and discovered that 89% of them had no idea of the current rate of interest that applied to their account. Over 60% admitted to being unaware of the balance on their account. Other figures show that almost a quarter of under-25’s had a specific aim in mind for their savings, while those in the 55-plus group were not so certain as to the future use of their money. Men are also more likely to keep check on their balance and are also more likely to be aware of their interest rates. The report was carried out by the bank as it announces a link with What Money Means, a program me put in place by the Personal Finance Education Group aimed at increasing awareness among young people as to the importance of keeping track of money in now days
According to Market, which carries out the surveys that give the results, almost 40% of those surveyed felt worse off than a month before, in sharp contrast with just six percent who believed they were better off. One of the main influences on the fall in the HPI has been rising fuel costs, which in turn push up the cost of groceries and other household goods. Other indications of personal finance crisis are the increase in credit card usage and unsecured loans, both of which have risen sharply of late, as these tend to follow a time of recession as households look to borrow to prop up troubled finances. Furthermore, the problem lies almost exclusively with those households in the lesser income bands, with the higher earners feeling relatively unaffected by the problems.
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