The increasing financial freedom of UK kids is set to put the bank of mum and dad out of business, according to research from the latest Youth Economy Report from GoHenry, the prepaid debit card and financial education app for 6-18-year olds.
With more than half of UK parents (52%) unable to contribute to their kids’ financial future, young people are taking matters into their own hands by putting away more money than ever and saving for major life milestones.
The insights into young people’s earning habits – gathered from nearly 750,000 UK children and teenagers – indicate that Gen-Alpha and Gen-Z could be some of the most financially empowered generations in recent history.
Changing expectations of young people generating more savvy savers
While parents may feel pressure to support their kids, young people do not always feel the same. Around 1 in 5 (19%) 16-18-year-olds say they do not expect parents to provide them with any financial help1.
When looking at specific life milestones, almost three-quarters of young people (74%) don’t expect parents to help pay for a wedding, 72% don’t expect parents to help buy a house and 64% don’t expect parents to help foot the bill for the cost of education, such as university, training or an apprenticeship1.
In fact, UK kids are saving more than ever before with a 145% uplift year-on-year. Overall, savings hit an average of £61.03 per child, which is a monthly average of £5.09 and a weekly average of £1.17.
Theo, an eight year old from Doncaster, has been saving for a house and has already put away £75: “I watch Homes under the Hammer in the school holidays which has made me want to buy a council house, as it’s a little cheaper, and I could rent it out for good money! I get £2 pocket money per week, plus 50p for tasks like cleaning my room. I started getting serious about money when I could see the amount on screen with my GoHenry app, which made it easier to keep on top of savings. It’s important to start saving now as when I’m older, I will have to look after myself.”
Financially independent kids have their sights set on the future
With their new-found financial independence, more than four in 10 UK kids (42%) are already planning how to fund key life milestones1. The most popular include:
- Buying a house (35%)
- Driving lessons (39%)
- Going on holiday (34%)
- Moving out of home (32%)
- Attending university (30%)
To help cover the costs, entrepreneurial young people are looking to part-time work. 43% of teens aged 16-18 currently have a job and are earning £79 per week on average1.
And it’s not just their own futures that kids are planning to save towards. Almost a quarter (24%)1 of generous youngsters plan to save to help their parents pay to go on holiday, buy a car or buy a house. In fact, an average of £1,872.25 per child has already been put away by kids aged 6-18 for this exact purpose1.
Louise Hill, Co-Founder and CEO of GoHenry said: “While the bank of mum and dad will always exist, it’s clear that the younger generations are changing the nature of what parental lending might look like in the future. Our insights show that children as young as six are already saving for live events. Coupled with their increased earning power, Gen Z and Gen Alpha look set to be a financial force to be reckoned with.”
Learn more about the GoHenry Youth Economy Report and The End of The Bank of Mum and Dad, here.