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Parents call for financial education in schools

13/12/2012

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  • New research shows 87% of parents think financial education should be in school curriculum
  • Parents freeze children’s pocket money at 2011 levels against a tough economic background
  • Generous parents save for their children as well as giving pocket money

New research from Virgin Money shows parents want financial education to be part of the school curriculum in the UK. Virgin Money’s “Pocket Money and Parents” study found a resounding 87% of parents believe financial education should be part of their children’s overall education.

The survey was designed to understand parents’ views on the importance and role of pocket money in their children’s financial education, and whether an economic backdrop of austerity has changed or challenged how much pocket money parents give their children in 2012 compared with last year.

The findings show that, in some cases, parents give pocket money to their children as early as two years of age (5%) and by the age of ten almost nine in 10 (86%) youngsters will receive some level of pocket money.

91% of parents teach their children about the meaning and importance of money, and parents clearly see pocket money as a good way of doing this with the key reasons for providing pocket money being learning about money management at a young age and learning the value of money.

Key drivers for parents giving children pocket money:

Key driverPercentage
Learning about money management at young age29
Learning the value of money22
Learning about earning money as a reward15
Learning about spending and budgeting14
Learning about saving using short and long-term goals8
Other12

Parents’ desire to teach their children about the value of money is also backed up by their actions, with only one in five parents (19%) not using pocket money to incentivise their children. Parents use pocket money to drive good behaviour as well as teaching their children how to earn money through household chores including cleaning, setting the table and washing the car. Reflecting the tough economic background, however, two-thirds of parents (59%) have frozen the pocket money allowance for their children since last year.

Simon Hall, Communications Manager at Virgin Money said: “Receiving, spending and saving pocket money is often the first way for children to learn the basics of managing money – a skill they'll need for life. What’s fascinating from this research is the clear acknowledgement from parents across the country that financial education is important enough to be included in the school curriculum.”

“Regardless of the amount, giving pocket money to children as young as four or five can help them to begin learning about money management and the value of money. Pocket money also helps teach children about having to make choices and waiting while they save up for things they want.”

In addition to giving their children pocket money, 70% of parents said they separately saved for their children. Those interviewed cited driving lessons (10%), a first car (11%), holidays (14%) and even tuition fees (12%) as reasons for savings money.

Hall added: “By selecting the right savings account for their children, parents can teach them the importance of selecting good value products. Parents often put money in their child’s account over several years, so it’s important to choose an account that provides good long-term value.”

Previously called the Little Rock account, the newly renamed Virgin Young Saver account pays an attractive rate of 3.00% gross* p.a. / AER**, and is available through Virgin Money stores or by post to customers aged under 16.

ENDS


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Press Office
Tel: 0191 279 4676
email: press.office@virginmoney.com


PRODUCT DETAILS - YOUNG SAVER ACCOUNT

 Annual interest %
£1 - £10,000Gross*AER**
3.00%3.00%

Accounts have a maximum balance limit of £10,000, and must be opened with an appropriate adult named on the account as a trustee. All withdrawals are notice free and all trustees are required to sign for any withdrawals.

*Gross is the rate of interest paid to eligible non-taxpayers without deduction of tax. Interest will be paid net of tax unless the account holder is eligible to receive interest gross and submits the required registration form.

**AER stands for Annual Equivalent Rate and shows what the interest rate would be when interest is paid and added to the capital balance each year.


NOTES TO EDITORS

About Virgin Money

  • Virgin Money provides savings, mortgages, credit cards, pensions, investment and protection products to over four million customers
  • Virgin Money’s business ambition is to make “everyone better off” – this philosophy underpins our approach to business by offering good value to customers, treating employees well, making a positive contribution to society and delivering a profit to shareholders
  • Virgin is the official sponsor of the London Marathon, the biggest annual fundraising event in the world. Virgin Money leads the London Marathon sponsorship with the ambition to help runners raise £¼ billion over 5 years and will use its infrastructure, online capability and financial expertise to deliver that through Virgin Money Giving