Young people are worth £4.89 to the British economy, according to a survey by the London School of Economics. The research, published by LSE and O2 Money, also demonstrates that the spending power of children has continued to increase significantly beyond the rate of inflation, meaning that children are relatively wealthier now than they ever have been. In 1987, the average child received £1.18 per week and this contrasts with £6.84 in 2009, an increase of more than 500%.
The average child in Britain will spend more than £6,000 between the ages of seven and 15, an average of more than £10 per week for seven to 10-year-olds and more than £15 a week for 11-to-15 year-olds.
This unprecedented spending power means that these youngsters are handling more cash than any generation before them. This is in stark contrast to their parents, who, according to recent research, have been cutting back monthly spending across many essential items such as food, petrol and clothes as a result of the recession.
While this suggests that parents are protecting their children from the direct impacts of the recession, it’s not all the work of the parents as the research shows that young people have outgoings significantly larger than their reported incomings. Whilst their income from pocket money is £6.84 per week, across the age groups, the equivalent average spending figure is £13.18 per week, which experts believe is subsidised through part-time work, gifts from family or additional household chores to improve their spending power.
Fraser Campbell of O2 Money said, “The unprecedented spending power of young people means that these youngsters are handling more cash than any generation before them. With increased spending power however, comes increased responsibility and it is more important than ever that young people have the tools and support to guide them in making the right decisions and managing budgets from an early age.”